Shop owner in tears as she shares real impact of cashless payments on small businesses

A small business owner was left nearly in tears after realising the hefty cost of cashless transactions over a year.

Forbes reports that credit card payment processing fees for businesses have skyrocketed by 600% in the past decade, according to data from Axe the Card Tax, an industry lobby group established in October 2022.

Steph Reed, who runs Reed’s Refillery, has seen her award-winning zero waste shop gain popularity but she has now disclosed that she could have saved a significant amount if more customers had paid in cash during the first half of last year.

“I’m a town centre business which gives people the opportunity to access cash,” Steph shared with LancsLive. “I know that there’s businesses, certainly like mine and they’re not in a town centre, they might be in a village or they might be off from that and they don’t have the opportunity to encourage customers to carry cash more.”

From January 1 to July 19, 2023, her business, which is in Chorley, Lancashire, shelled out £934.55 in card fees. But in the same period from January 1 to July 19, 2024, the fees dropped to £606.95 as 34% more customers opted for cash, saving the business over £300.

“I think I was looking at VAT and inputting fees, so I thought let’s just add it up,” said Steph, recounting how she calculated the fees. “I was really shocked.”

“I think I actually cried a little bit that I had actually spent £934 to the bank, to the card holder. You really don’t consciously think about it, especially when you’ve paid for the actual equipment themselves, for it to be that much.”

Axe the Card Tax is a UK campaign aimed at reducing the costs businesses face when accepting card payments. The initiative has highlighted a concerning rise in so-called Card Tax, which has reportedly increased by up to 44% since 2016.

Steph detailed the impact of card payment fees on her business, noting: “When people pay by card, it charges a certain amount on my account for them to use it. So, for my business it’s around 1.75% of money I lose on a transaction if paid by card.”

She also emphasised the advantages of cash transactions not just for her own enterprise but for other businesses as well. Steph shared: “Cash moves quickly, so I can deposit my cash at the end of the day into the bank or into the Post Office and then that cash is in my account that evening.”

“Then, the cogs move quicker so I can do that order or I can pay that other small business supplier the next day. Everything moves so much quicker and you don’t need to wait so many working days for money to be paid into your account.”