Cash-only SMEs lose over £23,000 every year, says report
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New research by Expert Market has revealed that SMEs could be losing out on over £23,000 of profit a year if they fail to accept card payments.
The findings revealed that nearly half of all payments in 2015 were made using a debit or credit card, which equates to an average profit of £93,660 per SME. The data showed that 1 in 4 British consumers actively avoid businesses who operate a cash-only policy in favour of companies who accept card payments, suggesting that some SMEs are missing out on over £23,000 of profit per year by not taking cards.
With card payments predicted to make up 65% of all consumer transactions by 2025, businesses who operate without offering their customers cashless alternatives could risk losing over £35,000 per year from missed sales opportunities.
Figures show that nearly one in 10 small and independent retailers continue to decline customers who wish to pay by card, despite the fact that cash payments are in decline.
Last month, Payments UK reported that 2016 was the first year in which card spending outstripped cash transactions among consumers. Contactless now accounts for over 8% of all card payments and by 2025 contactless payments are projected to make up 47% of payments.
Adelle Kehoe, Head of Expert Market, said: "With such rapid innovation and competition in the financial technology space, the importance of cash payments is only set to dwindle further. Our findings highlight the need for cash-only businesses to adapt in order to remain competitive or miss out on huge profits by choosing not to keep up with consumer buying behaviour trends. As the millennial generation comes of age and their purchasing power becomes stronger, businesses will have no choice but to pay attention to their preferences."
Being able to accept card payments is key for any small business.
To ensure ActSmart can provide the best solution for all businesses, we have partnered two card processing partners - one for established businesses with medium to high card turnover and one for new and smaller businesses with lower card volumes.
Find out more about our card processing services.