UK SMEs are being urged to accelerate their adoption of alternative payment methods with cash-only retailers losing out on £12 billion worth of revenue by simply not offering alternatives to paying in cash.
That’s according to a new report of more than 2,000 small businesses and consumers by payment services company, Sage Pay.
Almost a third (31 per cent) of shoppers said they are more likely to shop with companies that offer a host of payment methods, while more than half agreed that having payment choice encourages customer loyalty.
However, there appears to be a consumer-business owner stand-off, with 80 per cent of small firms surveyed saying they will only adopt new payment methods – such as contactless payments or apps – if customers request them.
Sage Pay estimates that, in addition to losing out on potential sales revenue, the cost of handling cash payments for SMEs tops £17.8 billion.
Simon Black, chief executive of Sage Pay, said: “UK SMEs are a driving force in the UK economy but if they fail to innovate, they are in danger of being left behind.
“Reducing friction should be the focus for every business. Whether that’s looking at moving away from cash towards newer payment types, using ‘single-click’ checkout or adopting an omnichannel approach, this report looks at payments in the context of the consumers and businesses that use them.”
More than a third (36 per cent) of businesses surveyed confirmed they were planning to adopt contactless payment facilities within the next five years, but integration between online and offline channels still appears an issue with 63 per cent of SMEs failing to do so – despite more than half of consumers preferring to use more than one channel when making an informed purchase.
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