Hard to believe, but many small businesses still only deal mostly with cash. A report from Sage Payments Landscape reveals small and medium-sized businesses are losing up to $80.6 billion per year through cash payments.
The information is from an online survey of 1,110 business decision makers in the U.S. and 1,062 consumers.
The study found two major factors contributing to the loss: theft and human error. Business owners do realize the importance of alternative payment methods such as Apple Pay and Samsung Pay.
Fifty-three percent of business owners surveyed said they would use alternative financing in the future, and 73% are interested in crowdfunding.
While almost a quarter surveyed say they won’t be spending money on new payment methods right now, 20% have plans to incorporate Apple Pay and Samsung Pay within the next year.
Business owners have several concerns when it comes to moving away from cash to digital payments:
Sixty-five percent are concerned with cybersecurity.
Businesses are concerned about fraud. They spend, on average, almost $20,000 a year on fraud prevention, which is more than the average loss to fraud—$16,557 per year.
Many business owners are unsure which fraud prevention tools to use. The most popular method is using the CVV2—the three-digit code on the back of credit cards. Twenty-five percent of businesses are using chip card technology.
Over 1/3 of businesses are concerned that EMV, (Europay, MasterCard, and Visa—is a global standard for cards equipped with computer chips and the technology used to authenticate chip card transactions) usage will decrease their sales volume and will make payments slower and more complex.
Thirty-six percent believe cash will become extinct within the next 20 years.
“Our research proves that cash is bad for business. It’s costly and inconvenient, and appetite is growing for more innovative and flexible payment methods,” said Paul Bridgewater, Managing Director of Sage Payment Solutions, in a statement. “The stats we’ve seen come out of this study are part of a wider trend. We know that cash is in decline. Walmart now allows customers to pay in-store using QR codes; MasterCard has recently launched ‘selfie pay’ and Alibaba is soon to introduce a virtual reality payment system.”