A UK merchant study by Barclaycard finds that almost half of small businesses do not accept credit or debit card payments. As the report further mentions, this trend is contrary to consumers who say plastic is their preferred method of payment.
According to a new study by Barclaycard, small businesses are losing out on more than £8.8bn per year by not accepting credit and debit card payments.
The report found that nearly one in two small business (49%) do not accept credit and debit cards despite them being the preferred method of payment for 70% of shoppers.
Other key findings from the report include:
- A third of UK adults (32%) would consider walking away from a retailer if they could not pay by card and a quarter (24%) have done so in the last 12 months
- Seven in ten shoppers (70%) prefer to pay by card over cash and 44% pay by card more frequently than they did 12 months ago
- 17% of small businesses admitted to having no plans to introduce electronic payment options any time soon
- 21% have put off installing electronic payment terminals because they believe it is too expensive, while 11% worry that it would be too difficult to set-up
Barclaycard director of customer solutions Sharon Manikon, 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.”
While this UK report is not totally surprising, we would like to know how they define small business, either in terms of revenue or employees. Usually, only the smallest of small businesses, especially basic in-store merchants, would not accept credit or debit cards in any developed economy. Typically, reasons of cost and unwillingness to install the necessary equipment are why they choose not to do so. There are opportunities here for aggregators like Square, PayPal, and others to tap into this long tail of micro small businesses.
Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group
Read the full story here