Lack of new payment methods costing SMEs £1.6 billion
A lack of next generation payment options could be costing UK small businesses dearly, according to new research from Barclaycard.
The consumer study of more than 2,000 people revealed that an alarming number of people abandon sales if the retailers concerned lack appropriate methods to pay.
This could be costing an estimated £1.6 billion in lost revenue annually, with in-store invisible payments, online invisible payments, conversational payments and cryptocurrencies among the methods discussed.
Nearly a third of the millennial generation said they have avoided a purchase when the payment options are not available, while that figure drops to 15% among all age groups.
Nearly half of the millennial generation now use the methods of payment regularly, and more than a fifth of the age group want to do so.
Innovation at small businesses is therefore essential if they wish to boost their revenues and not miss out on potential sales.
Around one in four retailers recognised that they had lost custom due to a lack of modern payment options, while figure rose further to two thirds when contactless, mobile, wearable and online payments were also considered.
More than half of consumers revealed that they expect to find contactless payment options in retailers, yet just over a third accept the method of payment.
The Barclaycard study also suggests that cash could become redundant given the rise in invisible payment options, yet a fifth of SMEs said they have no intention of introducing it.
Losing sales is something that many small businesses can ill-afford and even though awareness of the methods is high, many are still failing to act.
Missing out on finance can have knock-on effects across the business, potentially causing cash flow issues and driving the need for refinancing.
With an abundance of alternative finance options available, it’s important that a business assesses its requirements and acts accordingly – investing in new payment options could come with an initial outlay but may recoup that in the long term.
Data from the UK Cards Association reveals that more than 21 million contactless cards were issued in 2016, with spending on the cards totalling more than £25 billion.
By Phil Smith