As the UK credit card celebrates its 50th birthday, the Federation of Small Businesses (FSB) highlights the transformative effect that card payment has had on smaller businesses and why they have become so important.
For those who have grown up with them, a world without credit cards seems utterly alien. As we move to an increasingly cashless society, it is easy to forget the impact Barclays had when they sent out 1.25m cards to selected customers back in 1966.
At the time, Barclays said that its aim was to “reduce the use of cash in shopping and other transactions and the scheme is designed to appeal not only to those who must travel and spend a good deal of money in restaurants, but also to the everyday shopper throughout the country.” Mission accomplished. A total of 31 million people now own a credit card and monthly spend exceeds £15 billion (Source: The UK Card Association).
It is now the exception to find a retailer that does not accept card payments, and card payment processing has become one of the first foundations that a new business looks to put in place in order to be competitive. However, many smaller businesses are intimidated by the prospect of installing card readers, integrating them with point-of-sale (POS) systems and paying transaction fees.
There are many reasons why UK businesses have chosen credit and debit cards as their primary methods of payment over the last few years. They improve cash flow as card payments usually clear more quickly than cheques. They offer greater security as they reduce the need to hold cash on the premises. They negate the need to chase late payments or worry about unbalanced cheques; and they reduce admin – a regular statement of card transactions is easier to reconcile than numerous cash transactions.
Taking card payments also allows businesses to maximise their sales opportunities by reaching a broader customer base (online, telephone, and international), as well as ensuring that all payments from customers are received directly. Mobile Card Payment Terminals also work fast enough for a business to be able to take multiple payments in under a minute.
While there has been a huge shift in the payment landscape, innovation continues to transform the way we do business. Customers are eager to embrace new technology as evidenced by Accenture research showing that e-commerce and contactless payments currently account for 18% of all UK retail sales, and are forecasted to account for more than 50% by 2020.
Businesses need to have the tools to succeed in the modern world, and the ability to accept card payments is one such tool. It can help firms take payments wherever they are doing business; face-to-face, online, over the phone or email.
Businesses that still don’t accept card payments or that want to improve their ability to accept and process card payments should consider getting advice from a body such as FSB, which offers Card Payment Processing services and Mobile Card Payment Terminals to members. Fifty years ago accepting card payments was a brand new concept, but today it’s an absolute essential for businesses that want to maximise their sales opportunities.
To find out more about FSB’s services, go to http://www.fsb.org.uk/benefits