The use of new electronic payment systems are rapidly growing
Consumers have never had a broader choice of ways to spend their money:
conventional credit and debit cards
contactless or “tap-to-pay” cards
digital wallets on smart phones and smart watches.
As well as Google’s Android Pay and Apple’s Apple Pay, South Korean smartphone maker Samsung plans the UK launch of its own contactless system, Samsung Pay, in the near future.
For small UK businesses this poses quite a challenge: 40% don’t even accept conventional card payments today, let alone contactless technologies.
Yet consumers want to use them: contactless transactions more than tripled in the last year, from payments worth £653 million in 2013 to £2.32 billion in 2014.
In the past, businesses have had to pay fixed monthly fees for card capabilities, making them too expensive for many small businesses.
And the long contracts were a particular problem in the rapidly growing pop-up retail sector where shops and restaurants come and go quickly.
A recent report from telecoms company EE and the Centre for Economics and Business Research found that Britain’s pop-up sector grew by 12.3% last year.
The only likely security risk is that a retailer is fooled into downloading malware onto their phone or tablet which could intercept the card payment details.
Some see the solution is to use one of the new breed of card reader devices that link to a smart phone or tablet running a sales app and providing internet connectivity.
These devices are either free or low cost. The companies that provide them – iZettle, PayPal, Payleven, SumUp, for example – charge a percentage of each transaction (typically around 2% to 3%), with no long contract or monthly fee.
Crucially, that figure is below the £30 limit for contactless card payments, and contactless transactions now make up about 30% of sales.
In common with most card readers of this type, the iZettle device comes with software that runs on a smart phone or tablet to manage transactions and generate sales reports.