From Apple Pay to contactless, PayPal to Amazon Payment, there are new and evolving payment methods that you can’t ignore; simply because in this digital age customers are quickly opting to adopt them. It’s really important that you invest in new payment methods. Cash is no longer king. Customer preferences have changed and crucially they encourage customers, subconsciously, to spend more.
2012’s cashless street
Two years ago, a street in Manchester proved that cash’s heyday was long gone. Beech Road, home to 20-plus independent shops, bars and cafes, undertook a social experiment and went cashless for a day – courtesy of Handepay, the company behind the stunt. The small businesses on that road wanted to see: a) how consumers would respond to card-only transactions and b) if turnover would be higher as a result of going cashless.
What resulted captured the headlines. You can read some of the reaction via The Guardian and the experiment’s dedicated website. It was controversial on the day – one in every 50 customers refused to embrace the spirit and rallied against the drive for modernity. But the result of the business’ bottom line spoke louder than any critique. In that one day, traders collectively experienced a 22 per cent increase in turnover.
The experiment proved that customers spend more with small businesses when they can pay by card. The motto of that story? Take card payments. Yes you will incur a service charge from your payment provider. But it will be compensated by an increased value turnover. Customers typically spend more, when they can spend by card.
Read more about the payments revolution:
- UK’s appetite for mobile payments increases as Liverpool FC embraces tech
- Barclays uses Pingit to become first UK bank to process Twitter payments
- World’s first wearable international payment app
On that point, I would advise against imposing a minimum spend or surcharge for card payments. I understand why it might be attractive in order to offset merchant services‘ charges. However, by making that demand, you give customers a second to reconsider their purchase. Time to question whether the really want to purchase. Which is not good. I know myself that I have refused to buy an item because I just don’t feel I should be penalised, just because I want to use card. Think like a customer and offer what they want.
Easy payment = increased sales
It’s also imperative that you make it as seamless as possible for customers to complete a transaction, whether you take payments online or in the real world. With the range of options, there are no excuses not to offer optimum efficiency.
For example, we offer the Amazon-style “one click” and invisible payment checkout process. This is because we know from exhaustive trial and testing that adding an obstacle, such as a security check, increases the rate of abandoned baskets. We have seen a slight increased in fraudulent payments as a result. But the money we make through increased transactions, both in terms of the volume we can process and the baskets that are completed, outweighs this negative.
Read on to fid out how payment data can help you understand your customers better.