Procurement · 22 June 2016

Small business owners have technology to scale up at their fingertips

Technology is now more accessible than ever before
Technology for small business owners is now more accessible than ever before

Coming to the end of our infographic-led look at the world of mobile payments, held in partnership with Paym – the way to get paid using just a mobile number – we analyse the opportunities available for today’s entrepreneurs.

Over the course of four articles, Business Advice has inspected the credibility and convenience, consumer demand, cash flow upsides and security considerations associated with businesses adopting technology that allows customers and suppliers to make payments quickly and simply using a mobile phone.

In our first article, we met Will Brightman and his small business Opiat. The company takes the antioxidant-rich by-products of coffee grounds and transforms them into flavoured luxury body scrubs. Brightman was exploring new ways to attract customers and grow the brand, and began employing a mobile platform to accept payments from customers that wanted samples of his company’s products.

“We went to a festival knowing that very few brands would be able to take cashless payments, and knew there were no cashpoints on site, so decided on the spur of the moment to invest in mobile payments,” Brightman told us. A growing number of payments the young entrepreneur now receives are through mobile, and he considers it a “key part” of his future plans to grow.

But what of consumer demand? Are customers seeing technologies such as Paym as the best way to make payments? Our second feature explored just this topic, and found the demographic driving most adoption was 25-34 year-olds – with 43 per cent using the technology.

As our featured case study, Spice Kitchen founder Sanjay Aggarwal revealed roughly 25 per cent of the company’s customers are using their mobile phones to make payments with. “We take payments in all sorts of ways, but because at the moment we’re largely a mail-order small business we rely heavily on online payments, and mobile phones are increasingly the primary tool for that,” he added.

“Consumers want to buy things they can see, smell and touch,” said Sanjay. “They demand faster and easier ways to pay for the goods they want, and mobile phones have already been proved as a good tool for doing that.”

Consumer demand for mobile payments has rocketed between January 2015 and January 2016. The number of payments made through Paym grew from 360,000 in the first quarter of 2015 to 840,000 in the last quarter of the same year.

As part of our analysis of mobile payments, we wanted to find out what kind of problems it was helping to solve. Research, and evidence from our case studies, pointed towards the technology as a big aid when it comes to cash flow management.

Silver Ray Healing’s owner Pippa Moye explained that the majority of her customers still pay in cash, but it’s really helpful whenever they are able to pay digitally. “It means your account is credited instantly, saving a lot of time and energy. It makes business, and life, simple,” she said.

Receiving late payments and being underpaid has been an ongoing theme of Moye’s startup story, and for her, customers need easier and more efficient ways to pay. “The problem I’ve found with people not paying on time or not paying the correct amount is that it just comes down to simple forgetfulness or lack of foresight.”

Mobile payments have meant Moye has less work when it comes to taking cash and cheques to the bank, and allows her to achieve greater clarity over the company’s cash flow situation. Driven by concerns chiefly dominated by security, our conversation with Moye led us nicely into our final article and infographic.

We decided to tackle the subject of security and trust, looking at what concerns remain. Our infographic revealed that fraud on contactless cards and devices remains low at £2.8m during 2015, compared with spending of £7.75bn over the same period.

Repeat Logo owner Brian Lonsdale has begun to accept mobile payments for his small business, a company that provides logos for small enterprises.

“We knew when we set up the business that speed was a key priority when it comes to payments, both for our customers and for us. We were fully-automated to take payments from customers via mobile straight away,” he explained.

“I’ve found that trust symbols are really important. Having logos means creates customer trust and they are more likely to buy from you.”

Small business owners need educating, he added, if they’re to get the most out of mobile payments. While fraud might be more likely at first, the more businesses adapt the more secure systems are likely to be. He went on to suggest the introduction of a trade body to help companies transition to mobile payments.

Money sent through mobile payments is growing. Figures from Paym have revealed that more money was transferred through its service in the last six months of 2015 than in the entire year before that.

Our features series has tackled the key themes in the mobile payments space, and brought together small business owners who are demonstrating the opportunities available for companies that are willing to embrace the technology. Entrepreneurs now have the tools needed to manage cash flow in a more advanced way, meaning they have the funds to hand necessary for existing and game-changing investments in their companies. We hope you’ve enjoyed the journey we’ve been on.

Have a look at our previous analysis and helpful infographics by visiting the links below.

Credibility and convenience – what mobile payments offer an exciting new brand

What consumers want from mobile payments, and how you can give it to them

Managing cash flow the mobile way – a sole trader’s view

Securing mobile payments: Protecting your small business

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ABOUT THE EXPERT

Hunter Ruthven was previously editor of Business Advice. He was also the editor of Real Business, the UK's most-read website for entrepreneurs and business leaders at the helm of growing SMEs.

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