The sign by the till has become familiar: card or phone only, no cash. For some customers it is a convenience, for others an irritation or a barrier. For the business, it is an arithmetic decision, and the numbers behind it are worth understanding whichever side of the counter you stand on.
Card payments carry visible costs. A small merchant on a modern acquirer typically pays a blended rate on every transaction, and on a £3 coffee those pennies are a real slice of margin. Scale that across a year and a busy cafe hands a noticeable sum to the payments industry. On paper, cash looks free by comparison. It is not.
Cash must be counted, reconciled against the till, floated each morning, stored, insured and banked. Bank branches have thinned out, so banking the takings can mean a staff journey or paid collection, and business accounts charge for cash deposits. Errors and theft, politely called shrinkage, follow cash wherever it sits. Studies of retail cash handling consistently find a total cost of somewhere between one and several percent of turnover once staff time is priced honestly, which puts it in the same band as card fees, and above them for busy, low-ticket operations. Add the speed of a contactless tap at peak time, when queue length is effectively capacity, and the till sign starts to explain itself.
The customers the arithmetic leaves out
The counterargument is not really about business cost at all. A meaningful minority of people remain dependent on cash: some older customers, people budgeting in physical envelopes because it works, people without banks, children, and anyone whose phone has just died. Card-only policies exclude them precisely because exclusion is invisible at the till. The customer who cannot pay simply stops coming.
Regulators have responded to the wider thinning of the cash system with access-to-cash rules that protect deposit and withdrawal facilities, but no UK law obliges a private business to accept cash, and legal tender is widely misunderstood: it concerns the settlement of debts, not shop purchases. So the choice stays with the merchant, and the merchant's choice increasingly follows footfall economics.
The likely settlement is a long mixed period rather than a cashless cliff. Businesses with queues and small tickets will keep drifting to card-only. Businesses whose customers skew cash-dependent will keep accepting it and quietly absorb the handling cost as a service. Both are rational answers to the same sums, applied to different queues of people.
