Apple Pay, contactless cards, bitcoin, PayPal, and of course cash, are just some of the ways we can now pay for goods and services. While no SME owner goes into business because of their love for payments technology, they will accept that without the ability to accept various payment methods, there is no business!
Diversifying payment acceptance options can be challenging for SME owners to keep up with; however, this will not only help to provide a convenient service to customers, but could also provide valuable transactional and business data to inform future business decisions.
Below are some items we should consider here:
Cash payments are reducing
The Payments Council recently predicted that by 2024, only 34 per cent of transactions in the UK will be made in cash (compared to over 50 per cent today). While this may seem a while off yet, Visa Europe recently revealed an increase in the number of contactless card payments, suggesting that we are indeed heading closer towards becoming a cashless society. With this in mind, and consumer expectation that they can utilise the options given to them by their banks, SMEs should think twice before ruling out newer payment methods such as Apple Pay.
Cost of cash
We should also consider the cost of cash as well as the associated risk of holding large amounts of cash. With interest rates currently low in the UK, there really is only one way for rates to go in the future and retailers should be ready.
The cost of accepting, holding, and transporting cash is not the only expense SMEs incur. The introduction of the UK living wage will see workers being paid £9.20 per hour in the next five years. Many SMEs are reliant on ‘manpower’ to collect, reconcile, and transport their cash – an approach that will become less economically viable as the cost of the workforce increases. Hours spent ‘tallying the cash register’ can easily be eliminated with electronic cash acceptance.
Technology to drive business growth
SMEs are becoming increasingly tech savvy – and while physical loyalty cards are a great way to encourage customers to return we have come a long way from this ‘old-fashioned’ type of incentive. There are a number of digitised loyalty applications available that consumers can store on their phones as opposed to another card for the wallet. These applications also allow the retailer to gather data on products and sales trends. This in turn can be fed into business applications on an intelligent point of sale and assist SMEs to revolutionise their inventory, management, marketing, loyalty, and payroll systems.
With staff to manage, invoices to track, marketing strategies to develop, and budgets to keep on top of, (amongst a whole host of other tasks), it’s no surprise that reassessing payment acceptance strategies often gets resigned to the back burner by time-constrained SME owners. However, uttering the words 'sorry, we don’t accept that' to customers can be more than harmful than you might think.
As we move into an increasingly digital and connected world, SMEs must keep up with advancements in payments technology. It’s time to wave goodbye to ‘cash registers’ and start seeing your Point of Sale as a Point of Customer Interaction – as a sales and growth opportunity.
Raj Sond, General Manager, First Data