Credit cards and mobile payments critical for small businesses

Credit Cards

According to Visa Europe, it seems that mobile point-of-sale terminals and the ability to pay by credit card are critically important especially for small to medium businesses. With the rise of mobile payments set to continue bolstered by contactless payment schemes such as Apple Pay and Google Wallet, it’s more important than ever to offer would-be customers the choice of paying by credit card and mobile.

Perhaps surprisingly, small businesses that don’t offer some kind of credit card payment method are losing up to 25% of customers, especially among the younger generation who expect the flexibility to pay however they choose.

Small businesses losing 1 in 4 customers

European research across five countries suggests small businesses are pushing almost 1 in 4 card holders out of the door by not accepting card payments, and one half  of these European card holders would chose to buy from a business that accepts card payment over one that does not.

Card payment adoption could have a significant impact on footfall and volume for small-to-medium size businesses, according to new Visa Europe research carried out online in five European markets.

When questioned about their shopping preferences, more than half of all UK consumers aged 16-75 (52%) agreed that they would choose to buy from a business that accepts card payments over one that does not.

Mobile Payments - mPOS

Among UK cardholders, 13% reported that, in the twelve months up to August 2014, they had been faced with no option to pay by card so chose not to make an intended purchase, while 12% chose to complete their purchase from somewhere else that did accept card payment.

This issue appears potentially more pronounced for UK SMEs than their Spanish or German counterparts and particularly acute when catering for younger customers. According to the research, 34% of UK card holders aged 16-34 confirmed that not being able to pay by card had led them to not buy the product or service (compared to 23% in Germany and 21% in Spain), with 20% having bought from a competitor instead.

Caroline Drolet, Head of Merchant Solutions at Visa Europe commented:

“There is a significant opportunity for small businesses to make a substantial increase in their business volume by integrating card payments into their operations. The alternative appears to be an increasing risk of a loss of business as more customers want to pay by card for transactions large and small.

Caroline Drolet Visa Europe
Caroline Drolet, Visa Europe.

“Concerns about convenience and ease of use of card acceptance are addressed by a new generation of acceptance terminals that make taking card payments quick and easy, even for tradesmen who are on the move. These devices called mPOS for Mobile point of sale terminals use the merchant’s mobile phone/tablet with a small card reader/pin entry device that provides the same level of security and convenience as any other terminal.”

The majority (64%) of UK card holders would prefer to pay by card for products and services costing between £21 and £100, increasing to 77% for transactions of £100 or greater. This suggests that these consumers appear to want the security and convenience of card payments for higher value purchases in particular.

Mobile Payments - Visa

Caroline Drolet continued:

“Mobile point of sale terminals address this consumer desire to pay by card and as such are growing in popularity among SMEs and for good reasons. They are an ideal fit for smaller retailers and for those businesses who travel to their customers, like tradesmen and sales teams. Having a convenient, safe way to accept payments on location is key, especially when customers are paying for more expensive items where cash becomes less practical.

“We know from previous research that around a quarter of small businesses that currently do not accept card payments are keen on using an mPOS device and expect to see this level of demand continue to increase as consumers increasingly turn to card payments.”

Mobile Industry Review would like to thank Caroline Drolet, and all at Visa Europe.

SOURCE: Visa Europe

By Roland Banks

Roland Banks has been passionate about mobile technology for the past 20 years. He started his career at British Telecom's research division working on collaborative virtual reality environments, before becoming a video streaming specialist at 3 UK where he helped launch some of the world's first mobile video services. More recently he enjoys writing about his obsession, and developing software that helps mobile operators analyse their subscriber data.

Roland has lived in Asia for the past 5 years, and tries to indulge his other passion for riding motorcycles whenever possible.

3 replies on “Credit cards and mobile payments critical for small businesses”

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