Growing your business
Card Payments: Reliable transactions in the palm of your hand
Card payments are active and everywhere in our increasingly digital and interconnected world. Diverse methods of transaction that span from popping in your pin to simply tapping your debit/credit card -or indeed your phone - on card terminal. And, with the total of card payment volumes in the UK expected to rise from 14.3 billion in 2016 to 21.9 billion by 2026, it has become an essential effort for all businesses, large and small, to get on board and ride that progressively advantageous wave of digital payments in-store.
That’s why this week we’re exploring what it means to take card payments as a small business and the myriad of positives that come with this modernisation.
Accept The Card, It Ain’t That Hard
Believe it or not but even in today’s digital climate, some businesses still refrain from accepting card payments either as a matter of principle or a matter of cost. Smaller independent brands may deem card payments an unnecessary luxury, especially in sectors such as vintage clothing, and/or the indie café scene; the idea of electronic sales not entirely as fashionable as a couple of quid in the patchwork pocket of your latest corduroy trousers.
Yet, this could have a negative effect on things like cash-flow, payment security and financial validity – a big problem with physical transactions being human error. Counting, handing over and recording cash transactions can be awkward and filled with the potential of mistakes. Electronic payments, however, are as accurate as it gets . . .
How Do Card Payments Work?
With an electronic point of payment (card machine) when a transaction is made, the request goes to and from your business’ acquiring bank and then to the customer’s chosen card network (Visa, Mastercard etc). Next, it pings the request over to the issuing bank – the bank that has issued the credit or debit card involved in the transaction – and, provided the customer has the funds available, this bank then issues the transaction.
And voilà! The bank sends through the authorisation and your business receives the payment. Any unsettled transactions are sent off via the card machine to the issuing bank in order to be processed for credit. Check out our infographic for more.
The system records it all and the processing fee only costs around 2 - 6% of the transaction (often a flat rate of a few pence when using a debit card), thus, ensuring the transaction is correct and the payment secure for both parties – quick, easy and precise sales from the POS to the bank in no time flat.
“Rapid growth in the use of contactless cards means cash will be overtaken as Britain's most frequently used payment method by the end of 2018, according to Payments UK, the trade association for the payments industry”.
The ease and accessibility of contactless payments works to ensure the aforementioned security of electronic transactions, while also being the quickest way to make a sale. Eliminating the need for the customer to enter their pin, going contactless can increase the likelihood of sales and bolster customer satisfaction in the process.
Mobile payments are the newest way to make a sale, featuring the same safety and ease of a contactless card transaction but making it that one step easier – an all-inclusive point of sale directly from your mobile phone.
With the number of contactless mobile payments totalling at 126 million in 2017, marking a 328% year-on-year rise, which, according to Worldpay, means that “almost a third of consumers [are] now taking advantage of their phone’s payment capabilities”. That’s a huge market, and one not to be avoided by businesses, large or small.