As tens of millions of people across the world continue to experience some form of financial hardship from the COVID-19 pandemic, enterprises of all shapes and sizes need to adapt. Consumers are changing their buying habits and new shopping trends are here to stay.
SMEs should take a close look at their finances to see where they can cut costs to remain competitive. Particular attention to finding the cheapest option should be allocated to back-end service providers like getting a payment processor. Selecting one of the cheapest online payment systems UK can save hundreds or even thousands of pounds while offering consumers a better price.
Consumers are flocking online
More than 17 million consumers in the UK are expected to change the way they shop forever. Pandemic or no pandemic, lockdown or no lockdown, vaccine or no vaccine, the future of shopping will be the same: consumers are flocking online in record numbers.
Approximately one-quarter of the entire UK population will spend more money online. Nearly one out of two UK consumers will avoid busy shopping destinations and embrace shopping from the comfort of their computer or mobile device.
Clearly, online businesses stand to benefit from a shift in spending attitudes. By some estimates, UK online retailers are modeled to record £78.9 billion in 2020, up from prior estimates of £73.6 billion.
But at the same time, UK consumers are saving more money than ever, implying people are more price-conscious and prioritize saving instead of spending. Memories of media headlines of the COVID-19 pandemic ushering in the worst economic downturn in 300 years will remain fresh in everyone’s minds and serve as a compelling reason against unnecessary spending.
If your SME doesn’t offer rock bottom prices, it will be difficult to convince consumers to part ways with their money.
Focus on payment processors
UK retailers can always find ways of lowering their costs to help customers save money. Some of the more obvious methods include embracing more advanced technologies, hiring brilliant workers that add a lot of value, negotiating lower prices with suppliers, and much more.
Often, an enterprise owner selects a payment processor and never bothers to check over the years with finding the cheapest alternative. The growing competitive environment as new fintech startups enter the space implies SMEs can benefit from a superior service at lower costs.
Below is a brief description of five of the more reputable firms that provide the cheapest payment processor.
Canada’s Shopify is among the reputable payment processors in the world and the company knows how to best leverage and size and scope to better serve its clients. Born as a software maker that helps enterprises of all sizes create compelling online stores, Shopify entered ancillary categories over the years, including payment processing. Shopify markets itself as a one-stop-shop for everything an SME would need help with.
Shopify offers discounted processing rates to all clients that use its payment processors. The variable per transaction fee fluctuations from roughly 2.4% to 2.9%, depending on the monthly package
U.S.-based Square was co-founded by Jack Dorsey, perhaps more known for creating the social media platform Twitter. The Silicon Valley enterprise is known for being at the forefront of software and hardware innovation in the payment processing space.
Square, much like Shopify, strives to offer discounted prices for SMEs that take advantage of more than one of its services. Square provides loans, web hosting services, website design solutions, among many others.
Square’s variable transaction fees range from 2.25% to 2.5%.
San-Francisco based Stripe is unofficially a byproduct of Ireland as it was founded by two Irish brothers, John and Patrick Collison. Their entrepreneurial success earned them the title of becoming the richest self-made Irish billionaires.
Stripe attempts to stand out from the competition by offering a pricing structure specifically designed for UK SMEs. Specifically, transaction fees for all Europe-based cards are 1.4% plus £0.20. Non-European cards are a bit pricier than other providers at 2.9% per transaction plus £0.20.
SMEs should have easy access to their data to determine what percentage of sales are conducted within Europe. This should make it an easy decision to determine if Stripe best suits their needs.
UK-based Opayo operated as Sage Pay until it was acquired by Elavon in late 2019. At the time of the acquisition, Elavon was the fourth largest merchant acquirer in Europe and the transaction was meant to expand its market share in the UK and Ireland.
Opayo offers SMEs a fixed cost structure based on the number of transactions. For example, the £27 monthly package offers up to 350 transactions. Bespoke plans are offered to SMEs that oversee more than 3,000 transactions per month.
Worldpay was acquired by FIS Global in 2019 but continues to operate under its legacy name. What separates Worldpay from rivals is its ability to offer online merchants multiple checkout options, including accepting payments via telephone or through a link sent through an email.
Worldpay is among the largest in the world with a presence in 40 countries and the ability to transact in more than 120 currencies.
Conclusion: Take this serious
Taking care of your expenses as an SME owner is the most important step in ensuring your customers are well taken care of. In this uncertain COVID-19 environment, it is more important than ever to take proper care of customers. Finding the cheapest payment processor can help you and your customers.
If you don’t, someone else certainly will.