Can small businesses survive in 2024 without accepting card payments?

SMEs (Small and Medium-sized Enterprises) account for 99.9% of the British business population, according to data from GOV.UK, with small businesses taking up a significant portion of that number. 

With so many small businesses, it is reasonable to assume not all of them have made the leap to accepting debit or credit card payments, with many still operating on a cash-only system. While this is still a very legitimate and traditional way to accept payment from customers, it puts businesses at a distinct advantage against those who have embraced credit and debit card payments despite being small operations or even ‘one-man-band’ setups.

With 60% of small businesses in the UK failing within the first three years, according to data from Fundsquire, it has never been more important for these up-and-comers to give themselves the best shot at maintaining a steady and dedicated customer base. Offering to accept payments into their business bank account via card - or even via online payments - is a small yet far-reaching step in this process.

So, if you’re a small business that still hasn’t begun to accept credit card payments, here’s why you absolutely should do so in 2024.

What percentage of payments in the UK are card payments?

What percentage of payments in the UK are card payments?

According to research firm Statista, 47% of point of sale (POS) transactions in the UK in 2022 were made using debit cards, with credit cards also making up a large proportion of overall card payments. Compared to the number of cash transactions made during the same period - which was a mere 10 per cent - a clear disparity has emerged between plastic and paper payments.

These numbers may be cause for concern for small businesses that are yet to get on board with card payments - especially contactless card payments, which have experienced a huge surge in the market in recent years. Today, contactless card payments represent a staggering figure in retail spending, with over 90% of all eligible payments being made contactlessly, according to Barclays.

Given the opportunity for virtually any business that sells goods or services in the modern digital world to accept card payments - and the fears and doubts that arise in avoiding them - small businesses should, at the very least, consider onboarding card payments into their strategy.

The reasons why your business may struggle because you don’t accept debit or credit card transactions

The rate of cash payments is falling sharply

We have already discussed how, in 2022, only ten per cent of transactions were made with physical cash - notes and coins. But these figures aren’t nearly as worrying for businesses that still rely on cash payments as they are when compared to the same statistics from a decade ago.

Even though card payments were still very much available and commonplace in the vast majority of British stores at the time, ten years ago, physical cash accounted for over 50 per cent of transactions, according to data from UK Finance.

This suggests that the gradual move towards card payments has been less about the availability of credit and debit cards (and now contactless payment options) and more about a shift in the way people think about how they spend every day. Speaking of which…

Contactless payments with credit or debit cards are quick and easy, keeping customers happy

The ‘convenience factor’ plays a huge part in the decision-making of modern consumers, especially when it comes to card payments. In a recent report by consumer data company Numerator, 87% of millennials say they rank convenience as important in the shopping experience, while 40% of consumers overall rank it first or second on their list of priorities when shopping.

Given that contactless payments are one of the most convenient ways to pay today - eliminating the awkwardness of having to remove cash from a wallet or purse and count it out - it’s no wonder the majority of the population is leaning towards the quickest and easiest method of payment, with so many leading busy lifestyles today.

Small businesses can survive without accepting card payments, but thriving will be difficult

With so many customers leaning towards card payments and contactless card payments - including utilising services like Apple Pay and Google Pay - small businesses everywhere would be wise to accept credit cards and give their customers the option to take advantage of this payment method. For nothing else, in the hopes of earning and retaining the business of those who value convenience in their hectic lifestyles.

Without offering card payments, small businesses can continue to survive, but their chances of growing and increasing their revenue in the digital age are drastically cut. If you own a small business and are yet to take credit card payments from customers, you feel as though your card machines could use an upgrade, or if you'd like to accept card payments online, speak to Handepay today.

Financial disclaimer:

Terminal hire contracts are provided by Merchant Rentals Limited, who is authorised and regulated in the UK by the Financial Conduct Authority (FCA) for Consumer Hire under FRN 720500. Terminal hire can be for consumer hire and non-regulated hire contracts. Please check your contract carefully for details. Regulation of all consumer hire fall under the control of the FCA.

Handepay Ltd is authorised and regulated by the FCA for Consumer Credit under FRN 673564. Handepay is a credit broker for consumer hire not a lender.

Handepay acts as an introducer of card acquiring services on behalf of EVO Payments UK, the card acquiring service provider. EVO Payments UK is the trading name of EVO Payments UK Ltd, a payment institution that is authorised and regulated by the Financial Conduct Authority (FRN number 959332).

Existing Cards Businesses- The one-month rolling terminal hire contract from Merchant Rentals is only available to businesses that are switching from their current acquirer to EVO Payments UK arranged through Handepay.

New to Cards Businesses- The 12-month terminal hire contract from Merchant Rentals is only available to businesses that are new to card payments and wish to receive acquiring services from EVO Payments UK, arranged through Handepay.

The Next Day Banking Settlement service provided by EVO Payments UK incurs an additional fee of £4 a month on top of your acquiring service charges and fees. Provided your card machine performs a reconciliation before 12am (midnight), you’ll receive settlement of funds the next banking day.

Editorial disclaimer:

The information we provide does not constitute financial advice and might not apply to your business. Always carry out research into your business’ needs when choosing a new merchant services provider.

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