Inconvenient for customers, time-consuming for staff and no safer than electronic payments, cash isn’t king anymore, and the sooner business owners wise up to this fact, the better.
The UK managing director of Worldpay recently warned that retailers not accepting contactless payments are at risk of being “left behind” as the technology increases in popularity with consumers. But the most recent statistics available – compiled by Barclaycard in 2014 – showed that a whooping 58 per cent of SMEs are not set up to allow customers to pay by credit or debit card at all.
With the majority of customers likely to choose a business where they can pay by card over a firm that doesn’t let them do this, micro business owners are quite frankly throwing custom away by refusing to let buyers pay in a convenient way.
Too many small retailers are still refusing to accept modern payments because of fears over processing costs. Of course, card issuers are always going to charge something to companies who get revenue electronically – these firms have to make money somehow.
But accepting card payments is now cheaper than ever before. New EU rules which came into place in December 2015 imposed a cap on interchange fees – the amount that card issuers can charge merchants for processing card payments. And letting customers use contactless payment is usually cheaper than requiring chip and pin for transactions under £10, according to Worldpay.
The idea that taking electronic payments requires a costly investment in cumbersome technology is also a fallacy. There are a plethora of mobile solutions out there that cost nothing and require nothing more than a smartphone or tablet – with traditional payment processors like Barclays as well as tech upstarts like PayPal offering competing systems.
Young micro businesses and pop-up traders operating from ever-changing locations stand to benefit the most from these innovations but the low investment needed means that the most grudging converts to card payments should give them a go.
Security worries are another commonly cited excuse for not moving with the times, especially when it comes to contactless payment. But though the number of UK contactless transactions processed in the UK rose by 160 per cent in 2015, figures from the the UK Cards Association show that card fraud as a proportion of purchases fell to the lowest level in almost five years at the same time – with just 0.2 per cent of card fraud involving contactless transactions.
These small costs are vastly outweighed by the benefits small businesses can get from taking debit and credit cards, which go beyond customer convenience. Transactions that require a mere tap are quicker than ones which need staff to count out the correct change, and make calculating takings at the end of the day vastly quicker.
Card issuers have agreed that all retailers accepting card payments will have to allow customers to use contactless by 2010, but small firm owners who are considering making the leap to card payments should act sooner rather than later.
For a practical guide to moving to more advanced processes as your business grows, don’t miss this expert advice.
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