Small and micro-merchants are switching to electronic payments across Europe – banks and payments companies must consider the specific needs of this segment.
As a new year dawns, commentators are widening their focus from the health effects of COVID-19 to its social and economic impact.
When it comes to payments, most of us understand COVID has rapidly accelerated trends evident before the pandemic, including the long-term move away from cash to electronic payments, the rise of contactless payment methods by card or wallet, and the emergence of alternative payments methods such as crypto.
New data from Payments Cards & Mobile’s Digital and Card Payments Yearbooks 2022 reveals the scale of this switch from cash to contactless electronic payments.
PCM estimate that the number of merchants accepting electronic payments will rise by 30% between now and 2026 across 28 European markets, with the vast majority being micro-merchants such as street food vendors, personal trainers and providers of other personal services.
Small and micro-merchants are switching to contactless card payments because consumers are no longer comfortable using cash from both hygiene and security perspectives; a recent survey from Nordics card services group TietoEVRY reveals that as many as eight in ten European consumers now favour contactless card payments over all other methods for their convenience, security and hygiene.
Meanwhile mobile wallet payments continue to rise in popularity, with WorldPay and others predicting they could account for almost half of the world’s non-cash payments by 2030.
Micro-merchants: particular requirements
When it comes to electronic payments, small and micro-merchants have specific requirements. To start with, the switch to electronic payments must be simple to execute, as small business owners don’t always have the time or expertise to undertake complex integrations.
Furthermore, a card machine for small businesses needs to be reliable, portable and secure to reflect the growing trend for micro-businesses to move to where their customers or markets are throughout the working day: think about taxi services, for instance, or at-home hairdressing.
Given the comparatively low turnover of most micro-businesses, transaction security is an absolute must, as losing revenue and customer trust through fraud can have a significant impact.
Finally, payment solutions offered to micro-businesses must be both flexible and fair.
In practice, this means offering a range of solutions that can be employed either in sync with a merchant’s mobile device, or on a stand-alone basis – together with a range of functions to suit every businesses’ needs, from basic payments acceptance through to refunds, paper and printed receipts, and sales history management.
Above all, the issue of cost resonates loudly with micro-businesses looking to protect their margins and grow revenues. In that regard, it’s important to offer transparent and easy-to-understand pricing structures, including low basic fees per transaction.
As electronic payments continue their relentless rise, acquirers and payment service providers should be looking to hardware and software options that meet the specific needs of the fastest-growing acceptance segment in the market – small business people new to the world of electronic payment.
For a discussion about low-cost, high-impact hardware and software solutions tailor-made for the smaller merchant, contact: https://sumup.co.uk/