Lack of payment flexibility sees independent retailers lose out
Cash is no longer king, which is why a third of the UK’s independent retailers are losing out on £10bn a year, new research has claimed.
Payment company Sage Pay, which has operations across the UK, said small businesses that refuse to accept card payments are missing out, since one-third of consumers put items back if a store does not accept a card.
Card payments account for 50% of transactions among small to medium-sized enterprises (SMEs), yet the new statistics revealed that 38% of SMEs do not accept debit or credit cards, causing them to miss out on a collective £27m each day.
More than half (64%) of British consumers have said they prefer to pay by card, compared to 26% who said they prefer to pay by cash. “Surprisingly, more retailers accept cheques than plastic, despite the fact that cheques are soon to be phased out,” Sage Pay said.
The company’s CEO, Simon Black, said there was a “disconnect” between what retailers were offering consumers and how the British consumer likes to shop. “Our research shows that consumers want flexible payment options. They want choice, and they want to pay in a way that suits them best. Retailers need to provide a range of options, not just to keep customers happy, but to ensure they reap the financial rewards.”
Meanwhile, National Federation of Meat and Food Traders (NFMFT) chief executive Roger Kelsey told MeatInfo.co.uk: “We have been encouraging card payments and we have a facility for members that gives them advantageous rates for debit and credit card transactions.”
He explained that card payments offered butchers better security, as it meant they would handle less cash during busy periods. Kelsey also explained that the alternative to card payments – cheques – could easily be lost or could bounce.
“Plastic is becoming the new currency, but that is also going to be overtaken, in the future, by contactless payments,” he predicted.
In agreement, Black continued that it was not only card payments that shoppers expected to see in shops now. He said the study also revealed that 26% of consumers asked also wanted to see a greater range of payment methods, such as contactless, mobile apps and in-store accessed websites. “At the moment though, adoption rates for these emerging technologies are low; just 6% of small retailers offer contactless solutions,” he added.
As a result, Black warned: “Too many retailers are reliant on outdated payment models. Cheques will soon disappear, while some argue that it won’t be long before coins go the same way. Consumers are increasingly making payments using near field communication (NFC) technology, for instance, which enables shoppers to make small transactions by holding their card against a reader.”
He said the country was “edging ever closer to a cashless society” and if retailers wanted to do well, they needed to “ride with the tide of change, rather than against it”.
- independent retailers
- card payments
- sage pay
- agreement black
- contactless payments
- contactless mobile apps
- agreement black continued
- payments offered butchers
- transactions ”he explained
- card payments offered