UK Small Businesses Unprepared for Cheque Decline
Research from payments provider WorldPay reveals that despite nearly two in every five small businesses or start-ups (42%) in the UK still relying on cheques as a day-to-day payment method, and more than three-quarters (76%) say that they were not aware the cheque guarantee card scheme is being phased out from June 2011.
Almost half (45%) of small businesses and start-ups were unaware that there are talks in place for the cheque to be phased out completely in 2018.
Indicating that there is still a long way to go in preparing businesses for the shift, the research also identified that more than three out of five businesses (62%) have not made any plans for an alternative payment method. Twenty-nine percent say they still expect to rely on cheques over the next few years.
When asked about the potential benefits of card payments over cheque, more than six out of 10 (61%) respondents indicated that card payments offered faster transaction times and would help them reduce time and costs associated with manually banking cheques. Almost a third (32%) of business owners also cited that the increased safety offered by accepting card payments would be a major motivation for them to replace cheque payments with cards.
Chris Thorne, senior vice president, small and medium-sized enterprise (SME) sales, said: “The death of the cheque guarantee card system will present UK start-ups and sole traders with a number of challenges with many of them relying on this method of payment. SMEs urgently need to made aware of the implications of this change, and need to be supported in their move to other payment methods.”
Thorne added: “The benefits of making the shift to card payments are endless – they’re quicker, safer and less labour intensive than cash or cheque and often businesses see an increase in the transaction value with the spend no longer limited to the cash in your wallet or your cheque guarantee limit. It’s a good idea for businesses to consider their options soon, to get used to a new system before the cheque guarantee card scheme is phased out this year.”