Think about your school canteen. Not long ago, there were only two ways for school children to settle up the bill for their school dinners – cash or cheque. But there is a wider trend of other payment methods becoming much more popular and it’s not something that stops at the school gates.
Figures published by Payments UK earlier this year showed that the share of cash payments made by consumers, businesses and financial organisations in the UK fell to 48 per cent last year (from 52 per cent in 2013).
This is the first time that ‘non-cash’ payments have exceeded those made with cash, reflecting the steady trend to use automated payment methods, debit cards and new technologies rather than pay by notes and coins.
We live in a country where our payments infrastructure is truly world-class and where we enjoy so much choice. The payments sector has changed hugely within the last 10 years, with the introduction of Faster Payments, which processes internet and phone banking payments within seconds, contactless cards and even being able to pay friends, family and small businesses using just their mobile number through Paym – the mobile payment service offered by 17 banks and building societies. In short, payment methods have become more convenient than ever before.
How does this affect schools? For schools, removing cash can not only reduce administrative time spent handling cash, it can also reduce the security risk of cash being left on site, and eliminate the cost of having to pay for the physical collection of cash to deposit at a bank branch. Many systems now available to schools will automatically generate emails to remind parents of when payments are due, meaning less time is spent by school staff chasing parents for overdue payments.
Of course, cash is still a hugely popular way to pay. For many people, cash makes it easier to budget and allows them to keep track of their spending in a way that alternate payment methods wouldn’t, perhaps finding they are more careful when handing over ‘real money’. And did you know that 644 million cheques were written in the UK last year? Although cheque usage has fallen from the peak of four billion cheques written in 1990, it is forecast that around 256 million cheques will still be written in 2024.
Plans are even underway to enable banks to process cheques using electronic images, rather than having to physically transport them around the country. This will speed up the time it takes to clear a cheque, and could let you pay in a cheque by taking a picture on your phone. A change in the law coming into play in July 2016 will make it possible and the banking industry is currently working to agree the necessary changes to the infrastructure and technological capabilities required to set a firm timetable for it to be introduced.
With the many advances in technology it is important to recognise that while each payment method has its own pros and cons, choice is the most important factor for the consumer. However, parents who don’t always necessarily carry cash might benefit from not having to remember to visit a cash machine. If you are in a rural area there may not be an ATM close by, and also for parents on a limited income where a cash machine won’t withdraw money for a value under £10.
One size doesn’t fit all One of the touted benefits of cashless payments is that they can remove the need to find the right change at the counter speeding up queuing times. Moving away from payments in cash could also promote confidentiality for students entitled to a free school meal by removing the need for a paper ticket or ticking a list.
For schools that are looking to offer more payment choice or who are maybe considering stopping cash collection altogether, there are a number of options to consider, with many innovations tailored specifically for schools. This article looks at some of the possibilities – but it’s important to recognise there is no ‘one-size-fits all’ answer.
For example, card payments are now ubiquitous and advances in technology mean it is possible to accept them without paying for a standalone machine to accept them. One example is iZettle, which provides its ‘Card Reader Lite’ to businesses for free, which can be connected to an iPhone or tablet to allow quick acceptance of card payments. It accepts all major cards, and also has a swipe function for occasions where the customer may not always have a PIN, such as a chip and signature card.
Looking at it from the parents’ point of view, one alternative is a prepaid card, which can be accepted virtually everywhere a debit or credit card can, but can be given to under-16s. Transactions are protected by a PIN and the company that issues the card will be able to replace it if it gets stolen or lost, and block the original card. They can be topped up in various ways - in shops, online, or at Post Office.
More of us than ever now own a smartphone or a tablet. Research published by the mobile payment service Paym showed that 44 per cent of customers have had to dash to a cash machine to get money to pay. Paym is a simple and secure way to send and receive payments directly to a current account held with a participating bank or building society using just a mobile number, and eliminates the need to ask for an account number and sort code.
Originally designed for person to person payments, banks and building societies have started to accept Paym for business accounts too – you should speak to your bank if you think it’s an option that could help you.
Cashless schemes in school can also provide parents with a peace of mind. Removing cash from schools would mean that there is less possibility of a child being bullied for their lunch money, having it stolen, or simply losing it. Parents also have assurance that their money is being spent in the way they intended rather than spent at the shops or local takeaway, increasing the possibility of their child eating a healthy lunch. Skipping lunch can have an effect on a student’s ability to concentrate and affect their ability to learn towards the end of the day, so again, more control over how a child can spend the money you give them will put parent’s minds at ease.
Online payment services There are some online payment services designed especially for schools and parents. For example, ParentPay provides secure online payments to over 5,000 schools across 165 local authorities in the UK. ParentPay removes the need for cash and allows parents to view their account statements as well as payment history, and check when payments need to be made. It can also set alerts to tell parents when to pay the school online. For those wanting to keep an eye on whether or not their child is making healthy eating choices, some schools will also be able to display their menu online or allow parents to see their child’s meal choice at lunch time.
According to ParentMail, over 90 per cent of parents say they would prefer to pay for school items online, as it’s more convenient than sending in cash or cheques. With their system +Pay, schools can inform parents by email or text about outstanding items they need to pay for. Parents are given a ParentMail account, which they can login to and pay bills online, with the money being transferred directly into the schools bank account securely. The system does allow for cash or cheque payment to be recorded, so if the school wanted to phase out cash payments they would be able to do so. They also allow PayPal payments to be taken. There is even a function which will allow parents to fill in school trip consent forms digitally, again making the admin process easier for the school.
PayPoint is a payment service provider that can help small to medium size businesses such as schools take advantage of online payments. It accepts all major debit and credit cards processing, as well as PayPal support as standard for improved customer experience. It also allows parents to send secure online payment links via email using their emailPay service.
The above are some of the options available to schools at the moment, but as mentioned the UK Payments landscape is growing and evolving. Cashless payments can have a positive effect on schools in reducing admin and paper work and removing the security risks involved with keeping money on the school premises, while allowing parents and students more flexibility. For many people, cash and cheques remain their preferred method of payment, and with an increase in free to use ATMs, cash will still be around for years to come.