A recent survey discloses small business owners are finding it difficult to use card payment machines as a result of contracts and monthly fees.
Small business owners are being deterred from using card payment devices due to the contracts and monthly fees associated with them, according to a recent poll.
The survey, conducted by card payment app, Tapeeno, revealed that 97 per cent of small company owners found these costs to be their biggest pain points when utilising the majority of card payment devices.
Over 550 small business owners from various industries participated in the poll, highlighting the significant role small businesses continue to play in the UK economy. However, many believed that in order to compete with customers, it was essential to have card payment technology and to spend money on expensive hardware.
According to Jaime Lowe, the Sales Director of UTP Group – the creators of Tapeeno, small business owners face a significant challenge when using traditional card payment technologies as they need to carefully manage their cash flow and often have lower revenue than larger companies. This can be particularly challenging for small businesses, which are already dealing with various issues such as reduced consumer spending due to high energy costs, inflation, and the lingering effects of the Covid-19 pandemic. Therefore, traditional payment technologies can exacerbate the difficulties faced by small businesses.
Lowe stated that Tapeeno has developed software that can convert smartphones into card readers, eliminating the need for additional hardware and avoiding long-term commitments or recurring fees to address this problem.
The Office for National Statistics reports that out of the 1.47 million enterprises in the UK, over 1.18 million are small businesses with one to nine workers. These small businesses, according to data from 2022, were responsible for more than 34 per cent of the total revenue generated in the United Kingdom.
Recent data shows a clear indication of the significant importance small businesses continue to play in the national economy is the fact that 99.9 per cent of businesses in the UK are still SMEs.
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The Sales Director noted that small businesses play a crucial role in the UK economy, but card payment technology has not always been set up to meet their particular needs. With Tapeeno, Lowe emphasised they aimed to change this and provide smaller businesses with a more effective and adaptable card payment option. There are no up-front expenses or charges to be incurred when the system is not in use.
He added that customers may cancel at any time and are only charged for what they use -1.50 per cent- for each transaction.
As the world moves towards a cashless society, the benefits of credit and debit card payments over cash are becoming increasingly apparent. Card payments are not only convenient but also allow customers to make online and in-person purchases without the hassle of withdrawing cash.
This trend is evident in the UK, where the use of debit cards has become the preferred payment method, according to the British Retail Consortium’s 2022 Payments Survey. In 2021, debit card transactions accounted for 67.28 per cent of all retail transactions in the country, with a total value of £282 billion. This represents an 18 per cent increase from the previous year’s figures.
Recent research has highlighted the increasing popularity of cashless payments, particularly among customers with higher incomes and those under the age of 45. According to the Federal Reserve’s 2022 Diary of Consumer Payment Choice, cashless transactions accounted for 57 per cent of all payments in 2021, up from 55 per cent in 2020 and 54 per cent in 2019.
The report indicates that consumers under 45 years old, who made up the majority of this trend, used cash for less than 20 per cent of their transactions.
By Adewunmi Adedayo