Digital payment outages are costing high street retailers an average of £255 for every hour an outage lasts, according to new research commissioned by the Post Office. Nearly a quarter (24%) of retailers report having to turn customers away, delay or pause transactions, or close because they cannot serve a customer at all (22%).
UK retailers surveyed reported an average of three payment disruptions in the last year, and the frequency of these events is predicted to grow. Nearly a third of UK adults (29%) admit they have been unable to pay at a store checkout in the past year because a retailer did not accept a payment method they could use. Among those affected, over one in five (21%) said the retailer did not accept cash.
Guidance for Retailers
As the government's recent 'Be Ready' campaign encourages households to keep cash and essential supplies for emergencies, the Post Office has issued guidance calling on retailers to consider reviewing their own contingency plans and ensure they can continue accepting cash when digital payments are unavailable. While 83% of businesses surveyed have a written or agreed contingency plan, 90% do not include accepting cash as a back-up, despite 81% agreeing that keeping cash available for customers and emergencies is important.
Cash helps businesses remain operational during disruptions, with two-thirds (69%) able to continue serving customers during digital payment outages. However, with only 32% of high street retailers surveyed saying they currently accept cash, the research reveals a potential resilience gap if digital payments fail.
Industry Response
Ben Hunter Woollard, head of banking at Post Office, said: "A payment outage can disrupt trading in seconds, resulting in customers being turned away and sales lost. Cash has helped many retailers continue trading during recent disruptions, but it is rarely included in formal contingency plans."
"With the government encouraging households to keep some cash available for emergencies, retailers should also consider how they will keep serving customers if digital payments go down in emergencies. If cash usage is being encouraged, so should its acceptance," he added. "Our new guidance gives retailers practical steps to communicate clearly with customers and build a plan that works for their business."
Although outages highlight gaps in acceptance, cash still remains an important everyday payment option for many consumers, supporting cash-only transactions that contribute £27bn to the UK economy. While contactless cards are now the most commonly preferred payment method, cash is the number one choice for over a fifth (22%) of consumers and used by more than half of the nation (58%) for everyday purchases.
Cash Acceptance Gaps
Among UK adults who have been unable to pay at a store checkout in the past year, 21% said this was because the business did not accept cash. For 68% of those affected, being unable to pay happened on more than two occasions. Only 28% of high street retailers say community needs and customer payment preferences influence their decisions about which payment methods they offer.
To support business resilience, the Post Office has published new guidance to help retailers plan for payment disruptions, meet local customer needs and clearly communicate payment options. Ed Woodall, chief executive of the Association of Convenience Stores (ACS), said: "Cash remains an important payment method for customers in convenience stores, with 99% of convenience retailers accepting cash."
"When people lose access to other payment methods through outages or issues with networks, cash is a crucial safety net that allows businesses to continue trading and serving their communities," he added. Helen Dickinson, chief executive at British Retail Consortium, said: "Retailers accept a range of payment methods, guided by their customers' needs. They recognise the importance of cash both as a budgeting tool for managing day-to-day spending and as a reliable option when digital payments are disrupted."
Melissa Samuel, postmistress at Bourton-on-the-Water Post Office, said: "As postmistress in Bourton-on-the-Water, I see first-hand how important cash continues to be to our local community." She noted that local businesses regularly come into the Post Office to deposit cash takings and use the change-giving service to have the notes and coins needed to serve customers. "Having local access to cash for business and customers becomes even more important when digital payments are disrupted," she said.
