A survey of 2,010 British people by Barclaycard has discovered that a lack of access to next generation payment methods is preventing small businesses from generating more revenue. An estimated £1.6 billion is suggested to have been lost this way.
Participants were asked to estimate the total number of times they had abandoned a payment in the past 12 months because a specific payment method wasn’t made available to them. These included in-store invisible payments, online invisible payments, conversational payments and cryptocurrencies.
Almost a third (29%) of millennials avoided a purchase they couldn't pay for with one of the above options. Across all age groups, 15% have abandoned transactions before completion. With almost half of millennial customers opting to use next generation payment tools, small businesses (SMEs) need encouragement to provide more up-to-date and increasingly popular payment methods.
The findings point towards a necessity for innovation from small businesses in order to keep younger shoppers interested. Barclaycard said that over a fifth of millennials are keen to use next generation payment more frequently.
Nearly one-in-four small retailers admit they have lost customers because of a lack of emerging, but increasingly popular, payment options. This rose to two-thirds when modern technology was considered. This includes contactless, online payments, mobile and wearable devices.
With this year seeing the 10th anniversary of contactless payments, Barclaycard has previously investigated how new payment methods affect consumers spending habits. During Retail Week, research found that 56% of UK consumers expect contactless payment to be available in clothing, footwear and accessories shops, but only 34% of UK retailers accept it. A quarter of smaller in-store retailers are yet to introduce the option of contactless payments.
Despite the survey finding that 27% of 18-34 year-olds predict invisible payments will only get more popular in the next five years - and that cash will become redundant - a fifth of SMEs do not feel the need to introduce them. However, almost three-in-ten small retailers have plans to update their offering over the next six months.
Greg Liset, Head of Small Business at Barclaycard, said: "Our figures show that SMEs are losing sales by not adopting increasingly popular technologies that facilitate invisible and conversational payments.
“While it’s encouraging that many smaller retailers are becoming aware of the importance of these emerging methods, they need to turn this ambition into action to steal a march on the competition and keep up with consumers both now and in the future."
There are established and independent companies that can provide a range of advice that will be specific to your business, card volumes expected and how you’re likely to accept card payments.
Your local TaxAssist Accountant is a very good place to start as they’re likely to have a relationship with a company they can recommend, or if you’re a member of a trade association they will often provide advice through their member services.