I've seen a marked increase over the past two years of people expecting to be able to use their debit or credit card for goods at shows, even relatively small craft fairs. Crafters who don't take payments very often lose out on a sale.
According to the British Retail Consortium*, card payments in 2017 accounted for 50% of all transactions; and contactless payments are the driving force behind this significant increase. Reading between the lines therefore, this means that if you are still not taking card payments whether that's online or in person at events and shows, you're potentially losing out on 50% more customers.
Card users are far more likely to buy impulsively and have a higher spend rate than those relying just on cash and contactless payments are proving to be the most popular for spend below £30.
New figures from Barclaycard, shows that half of in-store card payments up to £30 are now made by contactless. The growth is having a knock-on effect to mobile tap-and go as well, says Barclaycard which has recorded a 90% rise in the amount spent through its Android app through 2017.
Whilst the majority of card payments still take place in-store (67%), e-commerce shares are growing fast as more people choose to shop online. Paypal is set to be one of the dominant payment methods across Europe by as early as 2024. (FinExtra, 2018).
So what does this mean to you as a small business owner? If you've been dragging your feet over signing up to a merchant (the name used for a card provider) because you're worried about fees or managing the security of these transactions then there is no need. Firstly, the merchant provides secure encryption for its card transactions and secondly, if your website has an up to-date SSL certificate (it's wise to check as not all provide this free) - then you and your customers are doubly protected.
There are many companies that provide mobile card readers, your bank for one will be able to advise you; but also Sage Pay, iZettle, NetPay, Worldpay to name a few. By following this link (Ad), iZettle are offering a card reader for £25, instead of £59.
However, before you rush headlong into signing up with a merchant supplier there are some important caveats you need to be aware of.
There is another major factor behind this increase in the use of card payments, especially online and that is: customers know they are covered by the Merchant’s Buyer Fraud Protection. Customers know that if they have a problem with a product, they can go to the Merchant and open a dispute; and with PayPal they have 180 days to do this, irrespective of statutory legislation or your own Terms and Conditions.
However, thankfully these issues are rare but it's essential you make yourself familiar with your merchant's terms and conditions of use.
Once you've decided on a merchant, you'll likely pay a small amount to receive a card reader ranging from £29 (iZettle), £45 (Paypal) and upwards depending upon the type you choose. Fees vary between merchants but they are all competitive ranging from 1.75% to 2.5% per transaction, rates will reduce on turnover. This means on a £30 sale you will pay no more than 75p for the benefit of providing card payments to your customer. If you consider the potential upselling opportunities you have, because your customer is prepared to pay more, accepting card payments for your small business really is a smart move.
If you want to find out more about creating a merchant account, I've created an online course 'Opening a Merchant account with Paypal', which takes you step by step through the process of opening an account. The course also demonstrates how you can create your own Paypal buttons that take your customer to a specific service or product. You can find out more here.
Whilst it may be a few years before we truly become a cashless society, the trend for using cards and contactless payments is rising and if you want your business to capitalise on this trend, now is the time to get started.