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More shops accept cheques than cards causing customers to buy elsewhere
Small and independent retailers are missing out on £10bn each year because they don’t accept card payments, a study by Opayo has found.
Card payments account for 50 per cent of transactions among SMBs in the retail sector. However, Opayo’s study found that over one third (38 per cent) don’t currently accept credit or debit cards and as a consequence, suffer a significant loss in revenue. Almost one in three (31 per cent) consumers will put an item back on the shelf and go elsewhere if they don’t have enough cash on them, while 17 per cent will reduce the number of items they have. Collectively, these shops are missing out on £27m each day.
Surprisingly, more retailers accept cheques than plastic, despite the fact cheques are soon to be phased out.
But these findings are at odds with the needs and preferences of British shoppers. 64 per cent say they prefer to pay by card, with just 26 per cent citing cash as their favoured method of payment. Grocery stores, restaurants, takeaways and pubs are the greatest causes of frustration, with the average Brit carrying just £10 to £20 in cash at any one time.
“Every day, UK retailers are watching £27m walk out of their shops,” said Simon Black, CEO at Opayo. “There is clearly a disconnect between what retailers are offering customers, and how British consumers like 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.”
But it’s not just card payments that consumers want to see more of. Opayo’s study found that 26 per cent of consumers say shops that offer a greater range of payment methods make them more likely to shop there with 16 per cent attracted by new and innovative types of payment options – like contactless, mobile apps and websites accessed in store. At the moment though, adoption rates for these emerging technologies are low; just 6 per cent of small retailers offer contactless solutions.
Black commented: “Too many retailers are reliant on outdated payment models.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. Mobile wallets, such as the Google Wallet mobile app, are also on the horizon. We’re edging ever closer to a cashless society and if retailers want to flourish in the long run, they need to ride with the tide of change, rather than against it.”