UK small businesses are missing out on more than £8.8bn annually by not accepting credit and debit card payments, despite this being the preferred way to pay for 70% of shoppers. This is a £1.8bn rise from 2014 figures.
Payments completed using card is considered the norm for the majority of consumers, yet half (49%) of UK small and medium-sized enterprises (SMEs) do not accept credit and debit cards, according to Barclaycard.
A third of UK adults (32%) would consider walking away from a retailer if they were unable to pay with a credit or debit card, with a quarter (24%) admitting to doing just this in the last twelve months.
With total monthly card spend in the UK reaching an all-time high of £52.6bn, and year-on-year contactless spending also rapidly increasing, paying with card is now the norm for the majority of consumers.
So why do SMEs continue to operate on a cash-only basis? 17% of small businesses admit they have no plans to introduce electronic payment options any time soon – meaning they are potentially losing out on sales to their more technologically accepting competitors.
On one hand, SMEs do acknowledge that failure to accept a range of payments is putting their business at risk, with two thirds (64%) recognising that choice is important to their customers. However, over a fifth (21%) have put off installing electronic payment terminals because they believe it is too expensive, whilst 11% worry that the process would be too difficult to set-up.
In 2014, UK SMEs missed out on £7bn each year by not recognising card payments. The rise in this figure in comparison to today’s figure of £8.8bn, highlights just how quickly consumers are turning away from cash-only businesses in favour of more convenient methods.
Sharon Manikon, director of customer solutions at Barclaycard said: “Today’s time poor, busy shopper wants to pay quickly and easily and SMEs who don’t capitalise on this demand are likely to miss out on an increasing number of sales each year. Yet small businesses can easily buck this trend by accepting credit and debit card payments, which contrary to the concerns of some, are simpler and more cost-effective to set up than ever before.”
Family business Farndon Foods wanted to “move with the times”, and got a contactless terminal as soon as it was available. Daughter Nicola, Farndon’s Marketing and Branding Manager, remarked that, “from a customer perspective they expect that if other shops have the latest payment technology, we will have it too”. This ability to embrace the changing nature of payments over the years, has been key to their business success, so the question is if they can do it, why shouldn’t other small businesses too?