Research by Barclaycard suggests that UK SMEs are losing as much as £1.6 billion by not upgrading their systems to accept ‘next-generation' forms of payment. These range from invisible (saving card and shipping details) and conversational payments, to one-click ordering, contactless cards, and mobile devices.
No tech? No sale
Two-thirds of SME retailers have lost sales because they couldn't accept emerging payment methods, which are used by almost half of millennials (46 per cent of 18-34 year-olds). 15 per cent of shoppers, and 29 per cent of millennials, have chosen to abandon a purchase because next-generation payment was not offered.
Contactless payments can safely be called mainstream today, having been introduced to the UK in 2007. 24 per cent of SME retailers, however, still cannot accept this payment method, despite this being the preferred way to pay of more than four in ten consumers. Usage of contactless has more than doubled in the last 12 months, says Barclaycard.
Innovation, innovation, innovation
Innovation, then, is important to keep the SME landscape ticking over, especially as millennials age and their spending power grows. Encouragingly, Barclaycard found that four in ten SME retailers are ‘eager' to introduce new payment methods - and seven per cent are already entirely cash-free (and 61 per cent believe that cash will eventually become redundant). Almost a third of retailers plan to update their offerings in the next six months, with 11 per cent saying that they are taking this step because of lost business.
On the other hand, 34 per cent of SME retailers have held off on introducing new methods because they don't know how; 38 per cent have said that they don't understand how such payment methods work; and a fifth do not see a reason to convert.
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