Hospitality SMEs prefer cash due to ‘issues and costs’ of card payment systems

Small and medium-sized businesses in the hospitality and leisure sector are more likely to use cash transactions than SMEs in the retail sector, according to new research commissioned by the AA.

Cash accounts for approximately 28% of all transactions for hospitality SMEs with a quarter saying cash transactions represent more than half of their sales.

Retail SMEs suggest 20.6% of all transactions are cash-based with only 10% citing cash accounting for more than half their sales.

A survey of over 1,000 SME owners and directors regarding the issues they experienced with card payment terminals in the past 12 months reveals possible reasons for rejection card payments, at a time when businesses operate in an increasingly cashless society.

Some 67% of SMEs in the hospitality sector have been affected by one or more issues with their card machine in the past 12 months.

High costs are also a concern with answers showing that hospitality SMEs were 50% more likely than retail SMEs to complain about high costs (42% vs 29%), while one in four in both sectors (26% and 24%) had experienced hidden costs and opaque pricing in the past year.

Other common concerns among SMEs surveyed included malfunctioning machines (29%) and poor network coverage (30%).