COVID 19 sees increased retailer focus on electronic payment solutions – but which one is right for your business?

As many non-essential retailers re-open this week, the UK can expect to see an increase in the amount of retailers choosing to only accepting cashless payments in order to reduce the spread of the virus through cash handling.

However, it is not the only reason why cashless payment methods are on the rise.  Indeed, this time last year,  the BBC reported that more than 5 million people last year led an almost cashless lifestyle.  These figures were predicted to reignite the debate over the future of physical bank branches – 405 physical branches closed last year.  COVID-19 may prove to be the nail in the coffin for widespread cash payments and many pundits now predict that cashless payments will become the new normal.  Of course, this is a challenge if you have never taken electronic payments before – but it could work to your advantage, says electronic payment solutions provider UTP Group.

While it may seem sad to bid farewell to cash, the good news for retailers is that aside from the hygiene aspect, there can be major benefits from taking mostly cashless payments, including:

  • They are typically 3 times faster than cash payments
  • They eliminate cash handling costs, with no need for cash floats
  • They are more secure and offer better management control of funds
  • They are good for cash flow, especially when the bank makes fast payments direct to your bank account

Small and new retailers should be aware that they don’t just have to go with their own bank – indeed many do this, sign up to a long contract and don’t always get a good deal.

There are a number of independent providers for electronic payment solutions, all competing for your business and often shopping around for a provider can lead to a better deal – though it isn’t advisable to shop for a payment provider on price alone.  Reliability and trustworthiness are very important, and it’s also worth exploring the various electronic payment solutions to find the right one for you – it doesn’t have to be a physical card terminal fixed to a landline.  Physical retailers will normally choose either a countertop card machine or portable card machine – but sandwich vans and market traders often choose a mobile card machine, allowing them to take payments on the go.

There are also virtual terminals, which don’t require a physical machine at all and can be accessed online (ideal for phone payments) or an online payment gateway to accept website transactions.  It’s important to discuss these options with your provider to determine which is best for you situation, what each option will cost in terms of equipment rental and transaction fees (these can vary widely), how long the contract is, and of course how quickly the provider will deposit card payments into your bank account.  For example, UTP Group offer faster processing, this allows same day funding, whereas some banks can take days between taking the payment and then crediting it to your account, a challenge for retailers who need to restock the next day.

Increasingly, suppliers don’t need to see you in person and many payment providers will simply allow you to apply over the internet.  Typically, first time retailers will have signed up with their bank and are just waiting for their contract to expire to find a better deal – but it’s best to save money first time round if you can.  If this is the first time your business has taken cashless payments, it is better to explore your options, ask the right questions and find an electronic payment provider that works well for your long term business, not just one to help you through  a pandemic.

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About Lisa Baker, Editor 2305 Articles
Lisa Baker is the Editor of Always Finance, and writes about Business, Finance Technology and Healthcare. Lisa is also the owner of Need to See IT Publishing.