It’s often quipped that the Royal family rarely carry cash, but it seems that more of us are following the monarchy’s lead. A recent study by UK Finance confirms this, reporting that 57 per cent of all payments made in the UK in 2021 – a total of 40.4 billion payments – were made by debit or credit card. More than 23 million people in the UK used virtually no cash last year.

In part, this is a legacy of the pandemic when many retailers switched to a ‘card only’ policy, to reduce contact with the transfer of notes and coins in transactions. It has become customary for the majority of us and we are now less likely to use cash when shopping or eating out. The use of contactless payments with mobile apps such as Apple Pay and Google Pay is further changing the way we pay and the increase in the payment limit from £45 to £100 makes it even easier to ‘tap and go’.

Although these are relatively recent changes, the transition from cash to card has actually been a long time coming. The use of notes and coins has dropped from 55 per cent of payments in 2011 to just 15 per cent last year, and UK Finance predicts this will fall further, accounting for just six per cent of all UK payments by 2031.

It’s interesting to think how this switch affects businesses, particularly in the retail, leisure and tourism sectors, where cash has typically been a key consideration in terms of daily operations, banking and managing cashflow during peaks and troughs of sales.

In fact, the increase in card payments represents a significant opportunity for companies as it’s now possible to borrow against future card payments with a merchant cash advance. This provides a lump sum which is only repaid as a percentage of future card payments and is available to businesses which have been trading for at least six months with borrowing of between £5,000-£300,000 that can be arranged in as little as 24 hours.

The flexibility of this type of borrowing is superb and can enable a company to undertake essential work or marketing activity during quieter periods, or simply to manage cashflow to pay staff and suppliers. A merchant cash advance is a fantastic way for many small and medium-sized businesses to create stability, particularly in the current economic climate, and ensure that they are able to better tackle increased operating costs.

Cash may be king, but the way that companies take payments and manage their finances is changing. This is a prime moment to review and take advantage of the way that this trend can benefit your own business.