Cash is king no longer as contactless card transactions now account for half of all small transactions in small retailers, according to data released by Barclaycard.
The news follows a recent survey by payments provider Square that found while one in six consumers do not use cash at all, 44% of small business owners thought not taking card payments would not impact their business.
More than one in 10 transactions are abandoned when customers can’t pay using their preferred method. Two thirds of retailers without contactless have said they have lost customers as a result.
“Our figures show that SMEs are losing sales by not adopting this increasingly popular payment technology,” says Barclaycard’s head of small business, Greg Liset. One third of small retailers said understanding the new technology was the biggest barrier.
The transaction fee on card payments provides an additional challenge for convenience retailers, with the cost severely impacting the profitability of small transactions. A ban coming into effect in January 2018 on charging customers a card payment fee will further increase this challenge.
Commenting on the rise of demand for card payments, Anish Parekh from Broadoak Post says: “We own community stores, so sometimes it’s beneficial with a long term view that we absorb that cost to the convenience of the customer so that they keep coming back. After all, they’re not always going to be without cash are they?”
Surjeet Singh Notay from Notay Convenience advises: “Retailers should renegotiate with your payments provider. We have and have removed all surcharges from credit and debit transactions.”
The total revenue lost by small retailers through not taking card payments is estimated at £8.7billion.