Taking card payments for small businesses – everything you need to know

For small businesses, offering the right payment methods is what could turn window shoppers into paying customers.

A recent survey by takepayments, revealed chip and PIN payments have reduced by 12% in 2023 and contactless payments jumped by 25%.

As experts within the industry, we’ve asked them to share their insights into how small businesses should approach taking card payments.

The payment landscape

The way UK consumers want to pay has changed significantly, a change that was accelerated by COVID-19.

Contactless payments are the preferred method when it comes to paying for most Brits, with an astonishing 48% of consumers choosing contactless.

This could be down to advances in technology that allow us to tap away with our smartphones. Making a contactless payment means there’s no pressure to remember your PIN, which in turn, can allow small businesses to serve more customers by cutting down queue times, making it a convenient choice for both merchants and customers.

Fun fact: contactless is so popular there’s a growing movement of consumers arguing the limit should be increased much higher to £100, and the right bodies are listening, we just don't have a date yet.

Benefits of using a card payment machine in your business

Each year, credit and debit cards consume more payments than the year before, while cash payments continue to dwindle. And there are no signs of it slowing down.

But, while many businesses are riding the wave - with some even becoming cashfree, there are still many who are lagging behind.

7 benefits of taking card payments

1. Make more sales

We’ve reached a point where most of consumers don’t carry cash, and that can be a real problem if it’s the only payment method you offer because you’re forced to, either:

1. Turn the customer away - which is just about as far from ideal as you can get, or
2. Ask them to nip to a cash machine and come back - which is inconvenient for the customer and more likely to result in a lost sale.

So, by introducing a card payment machine you’ll be able to accept more sales on the spot, make your customer’s life easier, and boost that all important bottom line.

2. Encourage more spending

Did you know, people spend 12-18% more when using credit cards over cash1? -As well as accepting more sales you could make more from each transaction: more sales + higher value transactions = more profits.

3. Expand your net

 Card payment machines don’t just apply to instore payments. With the right terminal, they can be used to seal sales over the phone, too. 

That means you’re not limiting yourself to customers who live X, Y or Z miles away from your business. Distance doesn’t have to get in the way.

4. Every second counts

On average, standard card payments take 26.7 seconds to process. while cash takes 33.7. Those seven seconds might not sound like much, but times it by the number of transactions you take a day, week, month and year and it soon starts to enter the hours. Hours that could be better spent elsewhere in your business.

If you wanted to take it one step further, contactless payments take even less time (12.5 seconds, to be precise).

5. Tighten up your security

If you only accept cash payments, you’re going to have  notes and coins piling up in your till and, that can attract burglars. By welcoming card payments you could reduce the amount of cash you’ve got lying around, deter theft and benefit from greater peace of mind.

Added bonus: reducing the amount of cash onsite could cut your insurance premium too.

6. Stamp out disputes

Cash comes with a couple of problems:

1. You could be the subject of a dodgy £20 note and if it doesn’t get picked up at the point of sale, that’s £20 down the drain.
2. Someone gives you a £10 note. You give them their change, but they’re convinced they gave you £20. It might not happen often, but it happens, and when it does, it’s awkward. 

Any inconvenience is one too many - especially when you’ve got other tasks to get on with. The good news is card payments don’t come with any of that. You tap the amount into the machine (or, if you’ve got integrated payments, your till speaks to your card machine to do this automatically) and then the customer accepts the amount before they go ahead. 

You’re protected from fraudsters too. With AVS and CVV checks the card payment process is super safe.

7. Get ahead of the competition

Let’s say you’re a convenience store. Neither you nor the shop around the corner accept card payments; you’re on a level playing field. One day, you decide to make the move and invest in a card machine. You advertise it, people start to hear about it, and you have a USP over your competitor.

That kind of differentiator could be the difference between someone choosing you over the competition and by getting there first you win customers, and potentially loyal ones at that.

Payment processing solutions: everything you need to know

Card machines

There are a variety of card machines to choose from, all with their own software features such as ability to manage products and add gratuity. Some card machines also allow you to take cash so you’re not missing out any sales.

Pros

• Faster payments with Android technology
• 4G + WiFi + Bluetooth connection all-in-one
• Online reporting
• Safe and secure
• Set up in 4 simple steps

Digital payment methods

The prevalence of online payments is at an all-time high, and there’s a range of options to suit a variety of businesses. 

Payment gateway

With a payment gateway, your business is always open and ready to makes sales.

It hooks up with your shopping cart and allows consumers to pay for your goods and/or services through your website using their debit or credit card. Here’s how it works:

1. Your customer browses your site and adds what they like to their basket
2. They head to checkout (a page hosted by TakePayments) where they enter their card details
3. You get paid

Pros

• Can be customised to your business branding
• Real-time reporting
• Take payments from anywhere

Pay by link

Pay by link makes getting paid online simple, but rather than going through your website it’s all done via email - in fact, you don’t need a website at all!

To use pay by link all you need to do is log in to a secure Merchant Management System and either:

1. Create and send an electronic invoice
2. Send a customisable email with a ‘pay now’ button, or
3. Copy and paste a secure payment link into an email.

On the other end once your customer receives your email, they’re taken to a super safe payments page where they enter their card details. Voila - you get paid.

Pros

• No need for a website
• Real-time reporting and payment tracking
• Accept international payments
• Customisable for a consistent customer experience

Pay by link is great for venues who take bookings or mail order businesses. It’s a nifty option for any business who wants a better option than traditional paper invoices.

Phone payments

Thanks to virtual terminals, accepting card payments over the phone couldn’t be easier - you simply log in to a secure page on your end while the customer is on the line and enter their card details. That’s it.

You don’t need a bells and whistles website, simply an internet-enabled device like a smartphone, tablet, or laptop. 

Pros

• Real-time reporting
• Straightforward to use
• Take payments from anywhere
• Connect with more customers

Phone payments are a great option for businesses operating in one location who want to widen their customer base. For example, a bespoke furniture business in Cornwall could accept a phone payment from a customer in Scotland thanks to a virtual terminal. 

Cashplus Business accounts are made for freelancers, sole traders, small and growing businesses (Expect in-app features like spend categorisation, receipt capture and invoicing tools, to help you stay on top of your cashflow. Our mission is to help save small businesses time and money, so you can free up your energy to focus on what really matters.

This article was created 2nd January 2024

Please note, the content in this article has been provided by a 3rd party and is not guidance from Cashplus. Cashplus Bank make no representations or warranties of any kind, explicit or implied with respect to the contents of this article. Without limitation, Cashplus Bank specifically excludes and disclaims all express or implied warranties and conditions to the extent permitted by law, and any action taken using such content is strictly at the user’s risk.