SMEs miss out on almost £8.8bn in lost sales by not accepting credit and debit card payments, says research
New research from Barclaycard has found UK small businesses are losing out on more than £8.8bn each year by not accepting credit and debit card payments – an 18 per cent increase compared to just two years ago.
With total monthly card spend in the UK reaching an all-time high of £52.6bn and year-on-year contactless spending also doubling, paying with card is now the norm for the majority of consumers.
Seven in ten shoppers (70 per cent) now prefer to pay by card over cash and 44 per cent pay by card more frequently than they did 12 months ago. Yet despite this, credit and debit card payments are still not accepted by almost half (49 per cent) of small business retailers.
What’s more, a third (32 per cent) of UK adults would consider walking away from a purchase if they could not pay by card, with a quarter (24 per cent) having done so in the last 12 months.
In 2014 a Barclaycard study revealed that £7bn was the amount UK SMEs missed out on each year, with today’s figures demonstrating just how quickly consumers are turning away from cash-only businesses in favour of more convenient methods.
The move towards paying by credit and debit card now extends well beyond big ticket items as the average UK adult admits to carrying under £25 in cash, with more than a third (37 per cent) carrying less than £10. Despite this trend, however, 17 per cent 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 savvy competitors.
Nevertheless, SMEs do acknowledge that failure to accept a range of payments is putting their business at risk, with two thirds (64 per cent) recognising that choice is important to their customers. Over a fifth (21 per cent), however, have put off installing electronic payment terminals because they believe it is too expensive, while one in ten (11 per cent) worry that the process would be too difficult to set-up.
Sharon Manikon, Barclaycard Director of Customer Solutions 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.
“Through our 50 years of expertise in working with merchants to help them sell, we understand how important it is for businesses to find a payments option which suits their specific needs – but with the right technology in place, SMEs can ensure they’re keeping up with their competitors while preventing valuable customers from going elsewhere – a win-win for both shoppers and shopkeepers.”
Barclaycard has launched simple and transparent pricing packages supported by a new online tool to help SMEs find the right payment solution for their business and quickly get an idea of the costs associated with processing payments. SMEs can find out more by visiting: www.barclaycard.co.uk/business/accepting-payments/onlinetool
