Is your business equipped to take card payments? Investing in point-of-sale card readers and making sure you’re ready to take contactless payments may seem like a luxury in the early days of your business, but recent findings from UK Finance suggest it may be more and more of a necessity.
Figures released by the banking trade body, UK Finance, show that debit card payments have overtaken cash for the first time here in the UK.
In 2017, it was reported that 13.2 billion debit card payments were made last year – up 14% from the year before.
In contrast, the number of cash payments dropped by 15% to a total of 13.1 billion payments. It’s estimated that 3.4 million people in the UK hardly used cash at all last year.
Contactless card payments are on the up
UK Finance also found that there’s been an increase in the number of contactless payments used in day-to-day spending.
The UK, it turns out, is a nation of spontaneous spenders. Last year, there were 38.8 billion payments made in the UK and only 15% of these were for regular payments like bills.
The increase in spontaneous spending seems to go hand in hand with the rise of contactless payments, which don’t require a four-digit number to make a payment if the card is held on or near the reader.
There were 5.6 billion contactless payments in the UK last year, almost double the amount from the year before. Contactless payments are most commonly made in supermarkets, but are increasingly used for car parks and public transport.
This trend is set to increase too. UK Finance predict contactless payments will represent 36% of all payments by 2027, up from 15% in 2017.
Payment trends are changing
While cash is going to remain a key method of payment, it is likely to become less important as time goes on.
Alongside the surge in contactless payments, UK consumers are also being introduced to new payment methods. These include wearable and mobile payments, such as Apple Pay and Google Pay.
These accompany existing non-cash payment methods like prepaid cards, direct debit, credit cards, bank transfers, cheques, money orders and payments made over a phone.
While some payment methods are more popular than others, and some are better suited to specific industries, businesses serious about succeeding need to ensure they can take as many different payment types as possible.
Related: read about payments through the years and how much they’ve changed.
Shopping for the right deal
With the UK moving towards becoming a cashless society, the Federation of Small Businesses(FSB) have warned that small businesses could be hurt the costs of processing card payments.
With the ban on imposing surcharges for credit and debit card payments now in effect, small businesses need to pay these fees alongside the costs associated with compliance, set-up, authorisation and the payment system operating costs.
It’s therefore important to shop around and make sure you’re getting the fairest deal.
What to look for from your payment service provider
There are plenty of payment service providers on the market, each with distinct USPs. It’s best to explore your options thoroughly, get a few quotes, and find one that works for your business.
That said, you should look for a provider with the following qualities to ensure you’re working with a trustworthy company.
These are compliance requirements for payment processors, and are in place because payment gateways temporarily store client card information while it’s being processed. If they’re compliant, they’ve met the strict criteria so make sure you ask.
They’re compatible with your platform. If you’re selling online, such as through an eBay shop, then you’ll need a supported provider. If you have a physical presence then you’ll need a compatible point-of-sale device. If your deals are primarily struck over the phone, it’s important your solution matches this way of working.
They need to be secure. Check their website, and ask if you’re unsure, for information about their data protection and security. The best payment gateways will have automated tools to help combat card fraud, and other data encryption methods.
At KashFlow, we’ve partnered with a range of trusted payment processors to offer our customers great offers on a wide choice of companies. Learn more here: https://www.kashflow.com/payments/