Are costs associated with accepting card payments worth it?

In today’s digital age, many people are ditching cash for the convenience and security of debit and credit cards. Indeed, according to recent statistics from the British Retail Consortium, over half of all transactions are completed using cards. Of these, around a third are completed using contactless payment, a great technology that has made payments under £30 quicker and easier for both customers and retailers.

Cash is quickly becoming antiquated

The allure of credit and debit cards is such that many people now live their life without carrying any cash on them at all, leaving retailers who do not accept cards in an unfortunate position. By not accepting the most common form of payment out there, businesses risk losing hundreds, thousands or even millions of pounds in lost business over the years.

While it may once have seemed perfectly reasonable to forgo card technology for businesses selling inexpensive items and services, such as coffee or sandwiches, contactless and mobile payment technology has become so ubiquitous that this is no longer the case. In the past, spending one or two pounds on a credit or debit card would have seemed a little embarrassing, but the culture surrounding payments is changing, and it is up to small businesses and retailers to understand this and do something about it.

The benefits of taking card outweigh the drawbacks

Of course, there are certain costs associated with setting up card technology, and taking cash in hand can seem like the safer and easier option for more traditional retailers, particularly for those wary of the various ways in which technology can go wrong.

However, it is important not to underestimate the extent to which people, particularly the younger generation, base their spending decisions on how easily they can pay for goods and services. Once a group of young people realise they are not able to pay on card in a certain bar, for example, and they may never go back there again.

Payment technology is continuing to develop to make it as easy as possible for consumers to spend their money. The first car keys to have a contactless Barclaycard chip embedded in them were recently launched with DS Automobiles, part of Peugeot-Citroën. Even Fitbit, the exercise tracker, has introduced a band that incorporates a contactless payment chip.

With this information in mind, it’s hard to understand how some business owners still do not see the advantages gained from offering cashless transactions. According to a recent survey by a payments technology company, one in six British shoppers said that, on an average day, they don’t use cash at all, and a further 38 per cent describe themselves as “card-first” shoppers. The survey also disclosed that 30 per cent of people admitted that they haven’t taken out cash from an ATM or bank within the last week that the research had been conducted.

So, if you are a small local business, are the costs associated with accepting card payments worth it? Well six out of ten consumers stated that they would shop more frequently at small businesses in their local area if they could pay by card. If smaller businesses are to successfully compete with larger high street and online stores, ensure that you are making your checkout process as seamless as possible. Do not lose custom to a competitor across the street, who enables customers to pay by their card, phone or even car keys in the not so distant future.

Sources
[https://www.theguardian.com/money/2017/jul/12/cash-contactless-payments-uk-stores-cards-british-retail-consortium] [https://www.theguardian.com/money/2017/sep/02/contactless-car-keys-debit-card] [http://www.independent.co.uk/news/business/news/uk-cashless-society-one-in-six-brits-a-card-only-shoppers-debit-credit-payments-a7979206.html]

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Jenna Hamlyn