Accepting card payments could reduce small business customer attrition by 24%

European research across five countries suggests small businesses are pushing almost 1 in 4 card holders out of the door by not accepting card payments, and one half of these European card holders would chose to buy from a business that accepts card payment over one that does not

London, January 2015: Card payment adoption could have a significant impact on footfall and volume for small-to-medium size businesses, according to new Visa Europe research carried out online in five European markets.

When questioned about their shopping preferences, more than half of all UK consumers aged 16-75 (52%) agreed that they would choose to buy from a business that accepts card payments over one that does not.

Among UK cardholders, 13% reported that, in the twelve months up to August 2014, they had been faced with no option to pay by card so chose not to make an intended purchase, while 12% chose to complete their purchase from somewhere else that did accept card payment.

This issue appears potentially more pronounced for UK SMEs than their Spanish or German counterparts and particularly acute when catering for younger customers. According to the research, 34% of UK card holders aged 16-34 confirmed that not being able to pay by card had led them to not buy the product or service (compared to 23% in Germany and 21% in Spain), with 20% having bought from a competitor instead.

Caroline Drolet, Head of Merchant Solutions at Visa Europe commented: “There is a significant opportunity for small businesses to make a substantial increase in their business volume by integrating card payments into their operations. The alternative appears to be an increasing risk of a loss of business as more customers want to pay by card for transactions large and small.

“Concerns about convenience and ease of use of card acceptance are addressed by a new generation of acceptance terminals that make taking card payments quick and easy, even for tradesmen who are on the move. These devices called mPOS for Mobile point of sale terminals use the merchant’s mobile phone/tablet with a small card reader/pin entry device that provides the same level of security and convenience as any other terminal.” 

The majority (64%) of UK card holders would prefer to pay by card for products and services costing between £21 and £100, increasing to 77% for transactions of £100 or greater. This suggests that these consumers appear to want the security and convenience of card payments for higher value purchases in particular.

Caroline Drolet continued: “Mobile point of sale terminals address this consumer desire to pay by card and as such are growing in popularity among SMEs and for good reasons. They are an ideal fit for smaller retailers and for those businesses who travel to their customers, like tradesmen and sales teams. Having a convenient, safe way to accept payments on location is key, especially when customers are paying for more expensive items where cash becomes less practical.

“We know from previous research [i] that around a quarter of small businesses that currently do not accept card payments are keen on using an mPOS device and expect to see this level of demand continue to increase as consumers increasingly turn to card payments.”

[i] Visa Europe mPOS Proposition Test Oct/Nov 2013

Note to editors

Visa Europe commissioned Ipsos MORI to carry out online interviews with c.1,000 adults in each of the following markets: UK (aged 16-75), Germany (aged 16-70), Italy (aged 16-70), Spain (aged 16-65) and Poland (aged 16-60).

This includes the following number of credit/debit card holders: UK-975 (326 of which were aged 16-34), Italy-827, Germany-664 (193 of which were aged 16-34), Spain-917 (320 of which were aged 16-34), Poland-790.

Survey data has been weighted to known population profiles in each country.

The survey was conducted between 29th August and 1st September 2014.

About Visa Europe

Visa Europe is a payments technology business owned and operated by member banks and other payment service providers from 37 countries across Europe.

Visa Europe works at the forefront of technology to create the services and infrastructure which enable millions of European consumers, businesses and governments to make electronic payments. Its members are responsible for issuing cards, signing up retailers and deciding cardholder and retailer fees.

Visa Europe operates a high volume, low cost business model that provides services to its members. Its surplus is reinvested into the business and used to improve capital and reserves.

There are 500m Visa cards in Europe, while €1 in every €6.50 spent in Europe is on a Visa card. In the year to September 2013, total expenditure on Visa cards reached €2 trillion, while point-of-sale spend increased by 8.5% to €1.4 trillion. Annual online spending on Visa cards continues to grow (20% year-on-year) and now stands at €240bn.

Since 2004, Visa Europe has been independent of Visa Inc. and incorporated in the UK, with an exclusive, irrevocable and perpetual licence in Europe. Both companies work in partnership to enable global Visa payments. As a dedicated European payment system Visa Europe is able to respond quickly to the specific market needs of European banks and their customers - cardholders and retailers - and to meet the European Commission’s objective to create a true internal market for payments.

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