By Daniel Hunter
Small and medium-sized businesses (SMEs) could be losing out on over £800 million worth of sales every year by not taking credit and debit card payments, according to new research from PayPal.
The survey of 1,000 British SMEs found that nearly 1 in 10 businesses potentially lost over £1,880 in sales over the last 12 months by not taking cards, suggesting that many are holding back their potential growth.
The research revealed that nearly a third (36%) of the businesses surveyed currently accept card payments, with cost being the main deterrent for not taking cards. 13% of respondents are put off by high monthly usage costs, and nearly 1 in 10 cite expensive set up costs of Chip and PIN machines as the main reason for sticking to cash, cheque and BACS payments.
The insight into the economic opportunity for UK SMEs builds upon previous consumer research conducted by PayPal. The study of nearly 1,000 consumers found that 65% of people carry £20 or less on them at any time, whilst nearly half (46%) of purchasers have been put off buying a product or service because they didn’t have the cash on them at the time.
To combat the concerns of many SMEs, PayPal, introduced the ‘pay as you go’ PayPal Here Chip and PIN card reader for small and medium-sized businesses in February this year and available across the UK since August. There are no monthly subscription fees, just the initial competitive purchase price of the card reader and a small fee for each transaction. Businessmen and women can pair the secure device with their smartphone or iPad to accept card payments where they’re trading.
Narik Patel, Director of Mobile Merchant Services, PayPal, said: “One of the challenges small businesses in the UK face is getting paid. Nowadays few consumers are carrying a cheque book with them, or even cash. This means businesses need to offer consumers alternatives, otherwise they risk missing a sale.
“Many small businesses have not offered card payments in the past because they’ve been put off by high fees and long-term contracts. We wanted to create an affordable ‘pay as you go’ option for them. We've been obsessed over every detail of PayPal Here to make sure it’s right for both British businesses and their consumers. Having made our name as a pioneer of online business, it’s now great to be helping businesses maximize face to face sales.”
Join us on