The truth about digital payments and learner drivers

Being self employed and running your driving school, cash has always been king. However, are things now changing? With COVID-19, higher demand and the changing attitudes of younger people, cash could be on the way out.

ADIs have become used to the idea of digital payments - it's common practice everywhere you look. These come in many forms, most notably; bank transfer, Square, Zettle or PayPal. 90% of the driving instructors we surveyed have used at least one of these since last year and we expect that to continue increasing.

With a recent UK study finding that cash payments have dropped 35% in the last year, we decided to reach out to over 500 of our learners to find out what their preference for payments. It turns out digital payments are the most preferred method, without a doubt.

95% of responses from our survey told us that they would prefer digital payments in their ideal world, with just 5% happy to stick with cash.

We decided to go further and find out what sort of digital payments learner drivers want to make.

Bank Transfer (60% of votes)

The classic and standard approach for transferring cash came out on top. This is probably due to the improvements of online banking in recent years, brought about by the popularity of services like Monzo. Transferring money can be done in just a few taps from the pupil's phone, for free.

The drawbacks are on the instructors side; auditing and ensuring the money is put into the correct account, more work required for capturing for year-end accounts. Best practice also recommends giving the pupil an invoice or receipt and, if receiving block bookings payments for, say, 10 lessons, transferring some of that money into a separate account until the full block has been delivered.

Card Payments - Online (25% of votes)

Card Payments are so common these days with learner driver generation using Uber, Just Eat and Deliveroo daily. Even with service fees, this generation prefers to pay online. This clearly why a quarter of those surveyed have went with this option in 2021.

We broke down the different ways for learner drivers to use online payments and how fees work.

• Zettle - formerly called iZettle, now have a service called Payment Links, which allows you to send a link to your pupil to get them to pay online. There is a transaction cost of 2.5% for using this service.
• GoRoadie Payments - Part of our new GoRoadie Pro app, that has just released on iOS and Android. Instructors can request payments for lessons or block bookings. If an ADI requests a payment, that fee is a low 1.9%, simply covering transaction fees. However, if the learner driver chooses to pay online, instead of in-car, they will incur the transaction fee, not the driving instructor. Find out more how payments work on GoRoadie Pro.
• PayPal - One of the worlds biggest payment engines allows you to send requests for cash or have set your driving school up as a business to receive payments. Their fee is currently at 2.9% + 30p.
• Square - Square, like Zettle, are known for their card reader system, but also offer online payments links, which has a per transaction fee of 1.9%. The only downside is having to set up the payment request information each time.

Card Payments - In Car (15% of votes)

The third option was to pay by card, in the car. This option still gets some good attention. Most outlets these days offer customers a choice and giving the option to pay by card is a nice extra.

The two main options here are as previously mentioned Zettle and Square, who both have packages on offer. Our recommendation would be Square as it has cheaper transaction costs at 1.75%, after purchasing the hardware (£16+VAT or £149+VAT).

Changing attitudes

Cash payments are without a doubt decreasing, recently a UK Finance study showed that cash transactions dropped 35%. This is mainly due to COVID-19, however, even in 2019 there was a trend showing cash usage decreasing.

The number of people that describe themselves as "rarely use cash", has jumped from 6.5 Million to over 13 Million in the last 12 months. Similarly, the number of people that say they "mainly use cash" has decreased from 2 million to 1 million over the last 12 months.