SMALL- and medium-sized enterprises (SMEs) are missing out on £1.6bn by not adopting new payments technology, Barclaycard research has found.
46 per cent of millennial shoppers are opting to pay using a ‘next generation’ payment solution such as online ‘invisible’ payments, where card and shipping details are saved before the transaction and ‘conservational’ payments, using digital personal assistants such as Amazon’s Alexa to make a purchase.
15 per cent of shoppers, rising to 29 per cent of millennials, said they have abandoned a purchase because they could not pay using these ‘next generation’ methods.
The study claims that SMEs have lost out on an estimated £1.6bn-worth of sales in the last year alone, due to customers taking their business elsewhere.
65 per cent of small retailers admitted that they have lost customers due to a lack of modern technology payments options, such as contactless, online, mobile and wearable devices.
The research, commissioned by Barclaycard, was carried out by Opinium research. 253 decision makers from SME retailers were interviewed online and a separate survey was conducted of 2,010 adults.
The findings indicate that innovation is increasingly important for SMEs if they are to keep their appeal with younger shoppers, especially as their spending power increases, Barclaycard said.
Some smaller retailers are considering making changes. 61 per cent believe cash will eventually become redundant and seven per cent have already prepared for this by becoming completely cash free.
38 per cent plan to introduce ‘next generation’ technology in the future, with 11 per cent admitting they are making this step as a result of lost custom.
“Our figures show that SMEs are losing sales by not adopting increasingly popular technologies that facilitate invisible and conversational payments,” said Greg Liset, head of small business at Barclaycard.
“While it’s encouraging that many smaller retailers are becoming aware of the importance of these emerging methods, they need to turn this ambition into action to steal a march on the competition and keep up with consumers both now and in the future.
“Making these changes needn’t be complicated or time consuming – with support from their payment provider, SMEs can ensure they have the right solutions for their business while satisfying the ever-growing group of tech-savvy, digitally-minded shoppers.”