Even in small businesses where there are no full-fledged procurement departments, implementing spend management is still very important. To effectively implement this, you will need to collate, maintain, categorise, and evaluate spend data. The goal is often to regulate compliance and improve efficiency. Are you saddled with the responsibility of implementing spend management? Here are five effective ways you can do it:

Perform a Detailed Spend Analysis

To implement spend management effectively, the first thing you need to do is perform a comprehensive spend analysis. Through this, you will have a better understanding of what you are spending and where to make changes. The analysis will help you identify key suppliers and savings opportunities you can target. You will also be able to minimise risk and expense that come with non-compliant or underperforming vendors.

Streamline Payment Methods

A standard procurement department can easily track and manage all purchasing activity. In the absence of this, staying on top of all employee spend can be very challenging. A simple solution will be to streamline payment methods. Finding a way to feed all spend data automatically into one company bill will make things a lot easier, and it will also improve accuracy.

Define the Approval Process

In addition to streamlining payment methods, you need to define and clarify the approval process with everyone involved in procurement in your organisation. Every employee that can spend on behalf of the company must know who to approach for approval, and there must never be any form of conflict. When everyone understands the approval process and respects it, procurement will be less frustrating. Mistakes will be minimised, and no one will have to cut corners.

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Use E-Procurement Software

There are several spend management and e-procurement software that can help you implement the process. Some of these platforms can be integrated as an all-in-one solution or as individual platforms that will make your work easier and more accurate. With this software, you can effectively capture tail spend data and get the information in a comprehensive form in your dashboard. From the data you receive, it will be easier to make decisions and implement changes.

Invest In Education and Training

If you have a procurement department in your organisation, investing in education and training for every member will be beneficial in many ways. Even if you don’t have a standard procurement department, you can train everyone involved in procurement. This is even more important if you have integrated an e-procurement software. When every person on the team is well-trained and on the same page, implementing spend management becomes easier.

Endnote

Spend management is important to keep your business or organization profitable. Fortunately, you can improve the process by performing a comprehensive spend analysis, streamlining payment methods, and using a management software. For effective results, it is important that you do it right. Implementing the effective methods discussed above will help you achieve your objectives.

Moorwand and K Wearables announced on Monday their intention to give away 300 “K Rings” – contactless pay providers in the form of a ring – to NHS staff in a display of gratitude for their work in combating the COVID-19 pandemic.

The rings are designed to facilitate contactless payment by having their wearers imitate a knocking gesture over a card reader, which can be used to trigger transactions up to £45 in size.

By removing the need to touch a surface, contactless devices present a safer payment alternative for essential workers amid a global health crisis.

Moorwand’s chief commercial officer, Luc Gueriane, commented on the giveaway: “We are in a time where community is at the forefront of everything we do. Although we may be apart, we as a nation have never felt more connected, so it is vital that communities and businesses come together to support health workers in any way they can.”

“Partnering with K Wearables to provide an easy payment solution to 300 NHS workers was instantly an initiative we knew we wanted to be part of.”

“K Wearables offered 100 free contactless payment rings to NHS frontline heroes, so the team could show its gratitude and we were overwhelmed with the immediately positive response”, added Philip Campbell, founder of K Wearables.

“We were delighted when our new issuer, Moorwand, generously offered to help extend this to 300 rings for NHS workers. It's great to be working with likeminded partners and we hope the recipients enjoy using K Ring as much as we all do.”

While it may sound obvious to conclude that the net profits of a business are the most important indicator with which to measure a company’s worth, the reality is that cash flow is just as important, and sometimes even more so. There are a lot of reasons for this – one would be that profits can be manipulated in the income statement more easily than cash on hand can. Net profits may be seen as a theoretical concept, while the cash that is accessible to the business is the more concrete way to see how an enterprise is actually doing.

Consider how profits can be determined largely in non-cash terms – they can be in the form of assets such as receivables. Some of these decrease in value over time, which limits the accuracy by which profits are measured. Some receivables can even be totally insignificant in the future – if for example a client pays too late, or worse, if they don’t even pay at all – then the asset that determines the value of the corresponding net profit decreases, which decreases net profit as well. This is the reality of business – that is why it is important to manage your cash flow wisely.

Cash flow measures the liquidity of an enterprise – and this is indicative of your overall paying capacity. The bigger the amount of cash the business has on hand, the more reliable they appear to their employees, suppliers, and other creditors – these entities can rest assured that they will be paid their due in a timely manner.

These are just some of the reasons why it is important to effectively manage the cash flow for your business. Here are some ways you could do that:

1. Collect your receivables as soon as possible.

If possible, have your customers pay immediately upon delivery or before they receive the goods or services they ordered from you. Prepayment is the best option, and it works – this is how most eCommerce businesses conduct their transactions. They usually ask for proof of payment before they deliver the items to their customers.

If possible, have your customers pay immediately upon delivery or before they receive the goods or services they ordered from you.

If prepayment is not possible, push for cash payments upon delivery. This is pretty reasonable for most retail-scale businesses.

For industry-scale trading, where the volume of goods and/or services and the corresponding amounts are considerably larger, do your best to get the shortest payment terms from your customers as possible.

Invoice them as early as you can. This will ensure that you have done your part in guaranteeing timely payments. It will also show your clients that you are taking your collections seriously. This is the best way to be professional about your intentions.

2. Get more flexibility in terms of your payables.

You can ask your suppliers to extend you credit terms, and you can attempt to make this as long as they will allow. This will let you be able to keep your cash in your hands for as long as possible, giving you leeway to pay for more pressing concerns. Just make sure that you don’t miss your deadlines, as some suppliers may charge interest rates for overdue payments. This is something you should avoid at all costs – as it will defeat the purpose of the exercise.

3. Consider selling your receivables in order to get cash up front.

If you have initially already extended credit terms to your clients, you may find yourself in need of reprieve in future situations. Some clients may also be unreliable in terms of meeting deadlines. You have the option to sell your receivables to get the cash you need immediately. For example, some staffing companies enroll in payroll funding, where the financing company purchases unpaid invoices from you, allowing you to have cash 24-48 hours after the invoice is presented for sale. Sometimes, you can even get your money within the same day if you request this specifically.

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This is a great way to manage your cash flow more reliably. If you have a long list of creditors, with receivables that won’t get settled any time soon, this may be a viable option for you.

4. Figure out ways to increase revenue.

You can get creative in terms of how to get more cash-based sales, so at least you have a steady flow of liquid assets. Offer discounts for cash on delivery or prepaid transactions; give incentives for customers who pay on time; and conversely, set minimal penalties for late payments, just so they’re encouraged to meet their deadlines, and be faithful to their terms.

These are just some of the preliminary guidelines that can help you manage your cash flow better. Remember that there are small ways you can tweak your cash flow to work in your favor, and explore workable options that will help lighten your load.

With the entire world feeling the effects of the COVID-19 pandemic, many businesses have found themselves in a precarious position. While virtually every enterprise is guaranteed to feel some degree of financial sting, the safety of your most precious assets – i.e., your team members – is infinitely more important than profit during this trying time. After all, if your employees can’t depend on you to prioritize their wellbeing at this point in time, when can they count on you? Business owners and entrepreneurs looking for ways to help guide their team members through this global crisis will be well-served by the following pointers.

Fully Embrace Telecommuting

No matter what your personal views on telecommuting are, fully embracing it is one of the most effective ways to keep your team members safe throughout this crisis. In order to flatten the curve and control the rate of infection, people need to isolate as much as possible. The more time your employees spend outside of their homes, the more opportunities for infection they’ll encounter, and it won’t take long for a single COVID-stricken employee to infect your entire workforce. Since carriers can be asymptomatic for weeks before the infection becomes apparent, it may be too late to control the spread by the time the initial carrier is noticeably ill. Additionally, for some carriers, the virus manifests itself through mild to mid-level cold or flu symptoms, so the infected party may believe themselves to be suffering from something less serious and come to work sick. Keep in mind that even if a carrier only has a mild case of COVID-19, the people they spread the virus to can have far more serious cases.

It is also vital that lines of communication be kept open while employees are working remotely. For guidance on how to keep your business’s finances stable during this time, Shakespeare Martineau’s Chris von Strandmann has offered advice on developing effective contingency plans.

Keep in mind that even if a carrier only has a mild case of COVID-19, the people they spread the virus to can have far more serious cases.

Send Money to Employees in Immediate Need

Many of us live paycheck to paycheck. Due largely in part to an ever-increasing cost of living, building robust savings simply isn’t feasible for most members of the workforce. That being the case, a single medical emergency, furlough or delayed paycheck can prove financially ruinous. As such, if any of your employees are in immediate need of emergency funds, now is the time to be generous. Whether they’re dealing with steep medical bills, require help making rent or need money for food, there’s never been a better time to show your team members just how much they mean to you. Fortunately, there are many convenient ways to send money to people in need.

Relax Stringent Deadlines

The world has changed dramatically in a very short span of time. Not only has the virus caused many enterprises to change the way they do business, it’s prompted many people to rethink their individual priorities. With people concerned about their personal safety, worrying about loved ones and dealing with sick family members, some individuals have had no choice but to put career matters on the backburner. In light of all the outside issues your team members are dealing with during this time, you should consider relaxing stringent project deadlines. Work can still be important, but with a pandemic ravaging the globe, it shouldn’t be your team’s foremost priority.

On the subject of deadlines, if you are worried about the pandemic leaving you unable to complete your contracts, then you aren’t alone. Consider looking into whether these contracts might be mitigated by frustration or force majeure clauses.

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Giving Sick Employees Time to Recover

Few things are more difficult than effectively doing your job while sick. Additionally, employers who expect team members to perform their usual duties while stricken will illness generally aren’t looked upon favorably by the general public. With this in mind, allow any employee who’s fallen ill to take a paid break from work until such time as they are completely better. Their recovery is infinitely more important than any financial setbacks you may suffer.

For the vast majority of us, the COVID-19 pandemic is a completely unprecedented occurrence. Aside from the few centurions who were around for the Spanish flu, no one in the developed world has experienced anything of this magnitude in their lifetime. There’s no denying that this is a frightening time to be living through. With infection numbers increasing by the day and a definitive cure not currently existing, even the most levelheaded among us can’t help but feel tremendous worry. Additionally, given the scope and severity of this virus, businesses – and world economies – are sure to be adversely impacted. However, in these troubled times, it is imperative that the safety and wellbeing of your team members take precedence over profit.

Below, Michael delves into business loans and the most important things you need to be mindful of when applying for one.

When you make the decision to apply for a business loan, the first thing you will notice is the vast amount of choice available to you. This can be extremely confusing if you are not sure what type of loan is suitable for you and your business. Thankfully internet comparison sites can offer a fast and simple process to compare loans and match them to your specific criteria.

Before you begin you must decide:

• What is the purpose of the loan?
• The amount you would like to borrow.
• The period of time you can comfortably pay it back.
• What annual percentage rate (APR) are you comfortable with?
• That you have taken into account any additional fees.

Once you have nailed down these specifics, it is time to start looking.

Reputation

Taking out a loan is a big commitment. Make sure you are borrowing from a reputable lender. A background check is a good way to start. You can typically find customer reviews online that should help inform your decision. Obviously, the best and most efficient method is to use a respected online comparison site to ensure the hard work is done for you.

Clear and simple language

Applying for a loan is daunting enough given the huge number of lenders offering finance at different rates. Then you have to make sure you pick an appropriate payment schedule. Once this is all done, then you will have to check the terms and conditions to make sure you haven’t overlooked something that might come back to haunt you. It is the duty of a loan provider to make sure the information you receive is clear and accessible. If you don’t understand something, make sure you ask for clarification.

Trouble-free payment

Different loan providers offer different payment schedules and lending terms. Traditional loans are paid over a set period of time on a daily, weekly or monthly basis. However, there are now a variety of lending options that are more tailored to the specific needs of borrowers. Merchant cash advances, for example, are calculated as a percentage of a business’s daily card taking and automatically repaid. Invoice finance is another form of lending that can quickly increase business cash flow. A lender can pay you a percentage of the value of your business’ invoices upfront, in return for a cut of their worth.

Hidden charges

Look out for hidden charges such as early, late payment or even processing fees. If you are not careful these can substantially add to the cost of your loan repayments. If a fee was not explained to you by your lender, make sure you contact them to challenge the charges via the Consumer Rights Act. This legislation protects your rights and makes it easier to contest hidden fees and charges. If this fails you can always seek redress with the Financial Ombudsman Service (FOS).

To find out more, visit: https://www.quotegoat.com/business-finance/

According to the Internal Revenue Service (IRS), 1099 means “information return.” You are also required to report the received information on your tax return. There is more than one 1099 form and they are specifically made for different types of income that are different from the one your employer provides you with. Whichever form of 1099 you receive, you should know that they all contain your social security number and the IRS will be notified if you don’t report that 1099 income on your tax return. We’ll be giving you a brief guide that can help you discern which types of income are reported on 1099 forms.

1099-MISC

Independent contractors and freelancers are usually the people who receive 1099-MISC forms constantly. As independent contractors provide their services based on a contract between them and individuals, corporations, or organizations, income should be documented in a 1099-MISC form. Whether a freelancer receives a 1099-MISC or not and as long as he/she was paid for the job, income tax should be paid. Sometimes the 1099-MISC form can be confusing as it’s filled with many calculations, and a useful 1099 generator can really help with all the calculations needed. These generators are easy to use and ensure that you don’t make any mistakes or costly errors when filling a form.  It’s always better to stay accurate when you’re filling MISC forms.

1099-A, B, and C Forms

These three 1099 forms are reserved for the identification of taxable income generally obtained from the cancellation of debt. 1099-A is usually received when your mortgage has been cut or completely canceled. The canceled mortgage debts are taxable as the IRS considers them as income. The 1099-B form is received due to the sale or bartering of securities and amenities. It’s usually sent by websites as most people who barter in person don’t need a 1099 form. Debt consolidation and settlements require a 1099-C form as whatever your lender or bank removes from your debt. It’s still taxable income in the eyes of the IRS.

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1099-G and R

Any money received from the government, whether it’s the state, local municipality, or the federal government triggers the issuing of the 1099-G form. Usually in the form of credit cuts and tax refunds or even unemployment checks. If you received any income from pensions, retirement plans, the IRA, or any profit-sharing program you might be due for a 1099-R form. The 1099-R form is usually at a tax advantage and sometimes even exempt, so it can be also considered book-keeping at best.

1099-LTC

LTC is short for long-term care, so the 1099-LTC form is reserved for long-term care insurance payments. The insurers usually send the form. Life insurance policies are also included as some payments related to death benefits can be given in advance.

While there may still be a few types of 1099s out there, these are the most important and common ones. Sometimes 1099 isn’t required, but it’s always better to stay on the safe side and keep track of them to stay on the safe side. Always remember to pay your income tax even if an expected 1099 form didn’t arrive.

You can't compare rent to a mortgage payment. This way of thinking about the rent versus buy decision is extremely flawed. Comparing a mortgage payment to rent is not an apples to apples comparison. In order to properly assess the rent versus buy decision, we need to compare the total *unrecoverable costs* of renting to the total unrecoverable costs of owning.

That may sound like a complicated task, but I have boiled it down to a simple calculation.

What would happen to the US if it paid off its debt?

There’s no doubt that maintaining a continuous cash flow when running a SME is incredibly hard. Here, Catherine Rickett, debt recovery manager at Roythornes Solicitors, shares with Finance Monthly her top tips to keep the cash flowing as an SME business owner.

Between recruitment and staff retention, financial outgoings and ensuring the bills are paid on time, chasing unpaid invoices can often seem like a job that can wait for tomorrow.

Whilst many suppliers and clients will pay without a quibble, some are more difficult to enforce, and it is these conversations that are frequently fraught with confrontation. Often it can be difficult to have ‘that discussion’ with a client whilst attempting to maintain a good relationship and retain them.

Building solid relationships are invaluable in business, especially when you're just starting out, and the prospect of bringing legal action against a long-standing or important client can often be rather daunting. I would argue that this is a major misconception, as 85% of our solicitor’s demand letters result in payment in full and in the vast majority of cases without any adverse impact on the business relation in question.

Having a firm but fair approach to payment collection is key to ensuring invoices are paid on time and in full. With that in mind, here are our top tips to keep business cash flow consistent:

1. Be proactive about collecting payments from clients. Have solid, late-payment penalties and collections policies in place, and stick to them. If your client doesn’t hear from you as soon as the payment is overdue, you can be sure that you won’t be the first to get paid; he who shouts the loudest, gets paid first!

2. Make it easy for your clients to pay. The easier you make it, the more likely they will pay you. Consider having card payment facilities, BACS, direct debit, online payments or even PayPal.

3. Know your client! Consider undertaking a credit check on new or even existing customers if you are having difficulty in obtaining payment. It may be that your customer is unable to make payment due to their own financial problems.

4. Consider applying an incentive for early payment. Money is better in your pocket than theirs and whilst you may feel uncomfortable lowering your prices for early payment, sometimes it can cost more to recover debt than any discount applied.

5. Have clear procedures. You need effective systems in place, with standard letters going out on the day after an invoice is due, seven days after etc. It’s not an ad hoc ‘admin chore’; you need to be strict with yourself and your customers.

6. Keep a ‘cash cushion’. Ideally, this should be three months' operating expenses to protect you from unexpected cash flow issues. Bad payers are a business reality and if your company is working from an account balance of nil, one slow sales month could mean instant disaster.

We understand the need to preserve relationships so that commercial agreements can continue and our team of experts are able to have these difficult conversations on your behalf, starting with our solicitor’s demand letter for as little as £5 + VAT. Even if the problem is not resolved at that point, there is no obligation to commence proceedings and we will then advise our clients on the appropriate action to take.

As payment methods become more seamless to cater for consumers who demand a quick and easy user experience, concerns around protection of payment details have been mounting. Here Finance Monthly hears from James Romer, Chief Security Architect for SecureAuth, on the ins and outs of customer payment information, how it’s controlled and the potentials for multi factor authentication.

In light of recent data breaches, consumer trust in the ability of businesses to keep their data safe is at a low. Despite being well-established and active for decades, authentication techniques such as username and password for online payment portals, have been failing consumers and financial institutions for years, as they are simply no longer enough to defend against bad actors. It is clear that more advanced authentication techniques are needed to keep our finances and data secure.

Why two factor authentication isn’t enough

To defend against increasingly sophisticated attacks on financial services, a comprehensive and intelligent approach is needed. A strategy that focuses on where most breaches occur – i.e. the identity level – and combines multiple authentication techniques that do not hinder the user is needed. Multi-factor authentication (MFA) combines a minimum of three factors: ‘something you are’ (for example, a facial scan), ‘something you have’ (such as a bank card) and ‘something you know’ (a passphrase or password) and can improve identity security both in the payment transaction process, as well as when the customer is accessing a payment portal.

To improve security around online transactions, two-factor authentication (2FA) was introduced to bolster traditional username and password methods. It involves using an additional verification step; such as information that’s unique to the individual, a physical token or an SMS one-time passcode (also known as SMS OTP). While 2FA was a step in the right direction, and might deflect the average attacker, for a motivated one it’s no longer enough. Phone-based authentication and knowledge-based questions can be easily defeated by determined attackers, as seen with the recent Reddit data breach. This pitfall, combined with the less than user-friendly experience, and delays that often accompany 2FA, financial organisations need to re-think their security strategy.

Applications in the financial industry

MFA has the potential to transform payment transactions and customer experience when accessing financial information, helping to protect against fraud whilst at the same time improving usability for the consumer. Overall, the user experience with multi-factor authentication is seamless, making a strong case for a move away from the 2FA approach for good. For example, looking at contactless transactions the end user will simply present their card, while holding their enrolled finger over the embedded fingerprint reader during the POS transaction. Verification of the fingerprint is performed on the card during the transaction, using a pre-enrolled template. If the fingerprint matches, then the transaction is approved. If the read or the match fails, then an additional challenge (for example PIN) can be offered.

But it’s not just cards that this can be applied to. When a customer is accessing an online payment portal, adequately authenticating the user is critical to protecting sensitive data. Although customers are accustomed to (and often reassured by) lengthy authentication processes, a reduced number of steps will greatly improve the quality and ease of their interaction. Forward-thinking organisations understand this and will implement modern techniques, such as adaptive authentication, where both security and user experience can be enhanced. These techniques act in the background to quickly verify different aspects of the user’s login attempt, considering factors such as location, device used and IP address, without compromising the experience.

For example, SecureAuth worked with a large UK-based financial services enterprise to secure and protect its customer portals. The company recognised that their business model was largely based on repeat custom, so aimed to prioritise customer retention through a personalised personal portal. Following detailed research into the preferences stated by their own customer base, this organisation was able to offer authentication that adapted to the user’s needs and preferences, for instance, by using demographic information to give the most appropriate authentication method based on market research. In addition, repeat users enjoyed a frictionless experience without repeat access requests, as authentication was only required at the transaction phase. This greatly reduced the amount of times that credentials were requested and improved the overall user experience, highlighting how with modern authentication approaches; increased security doesn’t have to impact user experience.

Protection of the authentication process in the financial industry is absolutely essential, as no single authentication technique is beyond the reach of malicious actors. It is only a matter of time before they find a way to circumvent traditional authentication methods. True identity security must rely on multiple factors combined with risk analysis. By implementing adaptive methods that flex and change according to this associated risk, organisations can allow access, deny, step-up or step-down users at the authentication stage. This means that even if a malicious actor possesses one aspect of the user’s unique profile, such as biometric information, then other factors will be considered to authenticate them. In this way, payment and personal information can be protected and consumer trust maintained.

Bitcoin is becoming a pretty normal currency in transactions worldwide, and it hasn’t failed to infiltrate paychecks either. So, if a salary is paid in part or in full in bitcoin, how is the income taxed? And how is tax applied to transactions anyway? Fiona Cincotta, Senior Market Analyst at City Index, clarifies the matter for Finance Monthly.

Bitcoin is a virtual currency, that can be generated by mining or bought using cash, credit card or a paypal account. Bitcoin began in 2009. At the start, one of the advantages of bitcoin was the fact that is wasn’t regulated and could be used in transactions to avoid tax obligations. However, tax authorities caught on and since then tax authorities across the globe have been trying to introduce and advance regulation on the bitcoin.

Whilst the cryptocurrencies exist on a global network, tax regulations in general differ for each country around the world. However, broadly speaking most tax authorities are on the same page when it comes to the treatment of the bitcoin.

As a general rule, buying a bitcoin anywhere in the world is not a taxable operation in itself. However, taxes are likely to occur when you sell that bitcoin, or possibly spend the bitcoin, and make a profit in the process.

How much you would be taxed on the transaction would then depend on several factors:

• The amount of gains;
• How long you were holding the currency for;
• If the country in question has capital gains tax.

Again, generally speaking, most countries do not consider virtual currencies to be “currencies” from a tax point of view. Instead they are treated as a property or capital asset. This means that any gains are taxed as capital gains in the year that they are realised.

As with property, capital gains tax is liable on profits, meanwhile should an investor realise a loss from a bitcoin transaction, the investor would be able to deduct any losses and therefore reduce the tax bill.

Realization happens when the bitcoin is exchanged for any other type of other property. This could be cash, services or products. Essentially almost any transaction which involves the bitcoin is in fact a realisation event and therefore gains are taxable. The following transactions could be taxable events:

• Selling a personally mined bitcoin to a third party;
• Selling bitcoins bought from someone to a third party;
• Using personally mined bitcoins to buy goods or services;
• Using bitcoins bought from someone to buy goods or services.

Scenarios which involve mining of bitcoin followed by either selling or exchanging for goods or services afterwards, will mean that the value received for the bitcoin is taxed as personal or business income, after subtracting any expenses incurred from mining eg cost electricity.

Meanwhile the other two examples, taker the bitcoin as an investment asset. Gain are taxed regardless whether the bitcoin was exchanged for money or goods or services. To cement this point let’s consider the following example. Should you own bitcoins that have increased in value, it is impossible to use them with realising a gain. Using the bitcoin to purchase a service or good, for example, is considered to be two transactions. One, selling out or realising the gain on the bitcoin and the second, being the purchase of the service or product. Few tax authorities would allow such a blatant loophole, as to not tax the transaction and ascension of wealth.

However, the implication of this is that every transaction involving the bitcoin is taxable. This in itself raises questions over the effectiveness of bitcoin as a medium of exchange, if the user has to calculate the tax liability after every transaction. So, the possibility now exists that over taxation of crypto currencies, could lead to their death.

As mentioned at the beginning tax implications can vary from jurisdiction to jurisdiction. The IRS in the US has a fairly standard approach to bitcoin taxation. The UK’s HMRC takes a more personalised approach and has has specifically said that it considers tax on bitcoins on a case by case basis. Whilst such a personalised approach is fine now, should the bitcoin increase in popularity HMRC may find its resources strained.

It's war on cash: Credit card giant Visa plans to pay Britain's shops and restaurants to ditch coins and notes.
A credit card giant is planning to declare war on cash by offering to pay shops and restaurants in Britain to reject notes and coins.

Visa claims that preventing customers from paying in cash would make transactions more secure.

Any switch from coins and notes to credit and debit card payments or services such as Apple Pay would also be of huge benefit to Visa, which makes money from transaction fees.

But consumer groups warned last night that it would put millions of elderly people and others who rely on cash and cheques at a huge disadvantage.

Tory MP Jacob Rees-Mogg said the firm should be referred to the competition authorities if it tried the move. 'It is essentially the behaviour of a monopolist and I do not think it should happen,' he said.

'People should be entitled to settle their bills using legal tender. The most deprived in society who do not have bank accounts and the elderly will be most affected by this.'

Visa has already begun a trial in the US which offers $10,000 (£8,800) to retailers who are prepared to update their payment terminals.

However, they can only get the deal if they agree to stop accepting cash transactions. A similar trial is expected to be launched in the UK. Jack Forestell, Visa's head of global merchant solutions, told The Daily Telegraph the company had its sights on Britain. 'We very much hope to bring a similar initiative to the UK in the near future,' he said.

'The UK is a bit further ahead than the US in terms of contactless use and cashlessness, so the initiative may look different but watch this space.' But James Daley, director of consumer group Fairer Finance, accused Visa of 'bribing companies to stop using cash more quickly' to make more money.

Consumer champion Which? said cash was still 'widely used' by shoppers. It added: 'Businesses should be led by how their customers want to pay, and not by the incentives offered by card firms.'

And the Federation for Small Businesses said the proposal could make businesses unattractive to tourists who wanted to use cash and was 'impractical' for rural areas with slow broadband speeds.

Its chairman, Mike Cherry, said: 'The vast majority of our members recognise the importance of offering cashless payment options. However, many have high volumes of customers that still want to pay in cash.'

In 2015 the amount of payments made electronically in Britain surpassed the number using coins and notes for the first time. However, cash was still by far the most popular way of paying in pubs, clubs and newsagents. A Treasury spokesman last night stressed that the Government remained committed to cash.

He added: 'The UK leads the way in financial technology such as contactless and digital payments. It's important that consumers have choice in how to pay for goods and services, and paying cash remains a legitimate and useful way to pay.'

(Source: News Capital)