UK companies could “stop using petty cash” as commercial card transactions surged by nearly a fifth higher in 2019 as consumers increasingly turn to plastic.
Contactless commercial credit card payments leapt by almost 24% in last year, according to data from the UK subsidiary of HSBC (HSBA.L).
Transactions across all its commercial credit cards, business debit cards, and corporate cards were up by nearly 20%. In another indication of the popularity of plastic over cash, cash advances on its commercial credit cards fell by 14% to 91,043 last year.
The data suggests that the use of petty cash — physical money set aside for business people for every day items like travel expenses and food — by companies across the UK could be phased out as the use of commercial credit cards booms.
“We’re increasingly seeing customers choose card solutions over cash as they look to manage their businesses more efficiently and more securely,” said Tom Wood, head of global liquidity and cash management at HSBC UK.
“Contactless transactions are up and the data shows that we’re increasingly seeing businesses use cards for their day-to-day travel expenses – likely because card transactions are far easier to keep track of than petty cash.”
Commercial cards were used most often at petrol stations, hotels, and building supplies stores in 2019, according to HSBC.
The rise of plastic could see the end of petty cash after being used by businesses for hundreds of years.
HSBC archives traced references to petty cash books used by a predecessor to Midland Bank almost 200 years ago, in 1835 and found pages from a petty cash book used at the Paddington branch of a predecessor of the bank dating from 1895, which documented purchases of items such as envelopes, tea, and pins.