Accepting card payments, what are my options?
Contributed by: Jeremy Berman

A small business' options regarding accepting card paymentsFor many small and medium-sized enterprises (SMEs), and most businesses in general, the card payment economy represents a substantial source of their overall revenue and income. The most recent statistics collated by UK Finance indicate that contactless payments eclipsed cash for the first time in 2017, accounting for 63% of transactions overall, a figure that has only grown in subsequent years. Despite this, it’s estimated that around half of SMEs are yet to install electronic point of sale terminals and are therefore missing out on a significant share of card-based business.

Further to this, according to a survey conducted by Barclaycard, around 1 in 3 UK adults would consider cancelling a purchase if the retailer did not accept card payments. In essence, if you’re not accepting contactless as part of your business’s operations, you’re essentially jeopardising the profitability of your venture and potentially stunting its growth. In this article, Berley, London’s chartered accountants for entrepreneurs and small businesses discuss the best ways to integrate card payments for your business and the options available to small and medium-sized enterprises.

How can I start accepting card payments?

If you’re yet to install an electronic point of sale for your business, there are a few considerations you will have to make before you start accepting card payments. First and foremost, you will need to gauge the number of card machines required for your business. It is generally considered good practice to have one machine per till on your premises, while some businesses will have an additional machine in an office for over-the-phone payments.

Next, you will need to understand the different types of card machines available to small and medium sized businesses. There are generally three types of electronic points of sale that can be implemented by small businesses and small business owners:

  • Countertop card machines: typically recommended for retailers such as high street stores and smaller goods and services providers. These are fixed terminals that make up part of a countertop till.
  • Portable card machines: The ideal solution for retailers in the hospitality industry such as bars, cafes and restaurants, this format allows you to take credit and debit card payments from anywhere in your premises.
  • Mobile card machines: Designed for businesses whose work involves a high volume of movement across the country, the mobile card machine utilises 3G connectivity and a handheld device to allow you to take payments wherever you have network reception. Intended for couriers, tradespeople and taxi drivers.

You should also consider whether you want to make contactless payments available to your customers, as well as Apple, Samsung and Android Pay. While it is not a requirement of these machines to be equipped with such capabilities, the increasing popularity of these payment methods means that this should certainly be a consideration if you are entering into the realm of digital payment.

Where can I get an EPOS machine?

There are various electronic point of sale merchants that are able to assist you with setting up your business’s card payment system. Before entering into a contract with one of these providers, however, you need to ensure that the machines they will be providing you with are compliant with Payment Card Industry Data Security Standards.

This essentially means that their machine stores, processes and transmits your customer’s credit card data securely, minimising fraud-related risks. When you’ve found a provider whose terms and fees you are satisfied with, you will enter into a contract with them that generally stipulates the service fees you will need to pay them at the end of each month. These vary between providers, so research and negotiation are important. Once this has been set up and your terminals are installed, you’re ready to start offering your customers the benefits of paying by card.

What are the benefits of paying by card?

Paying by card is an easy and efficient means of processing payment and a quick and simple way to pay for the customer. It also represents a great way for business owners to streamline their accounts and ledgers. With more and more businesses using digital cloud accounting software platforms to keep track of their finances, understanding your venture’s financial positioning can become much easier through the use of electronic points of sale.

Most cloud accounting platforms are compatible with digital banking systems, so integrating these and implementing them as part of your financial and fiscal operations can mean your business runs more smoothly. Settling cash accounts can be a menial and mind numbing task, particularly if you have other areas of your business that need attention. Linking your online banking, electronic payment terminals and digital accounting software can translate to less work for you and your business and a more accurate and informed financial operation.

Moreover, using PCI DSS (Payment Card Industry Data Security Standard) compliant card machines is an effective measure that businesses can take against potential defraudment, with customers’ credit card data being stored, processed and transmitted by secure hosting providers. This means that not only will your customers be better protected, but your business and its financial interests are also safeguarded when paying by card.

Is cash dying?

There has been a significant downturn in the number of cash-based transactions in recent years, with a large number of British institutions now going cashless in order to improve efficiency and hasten the transaction process. Transport for London is perhaps the most notable example of these, with cash on buses being phased out in 2014.

The fact that cash is untraceable means that its legitimacy can at times be questionable, whereas from a security standpoint, paying by card is fully traceable and secure, making it the preferred method of payment for Government institutions such as HMRC. According to statistics, the average UK adult carries less than £25 cash on them at any given time, with almost half stating they carry less than £5, meaning card and contactless payments are well-established as the number 1 method of payment for people in Britain.

Despite this, cash still holds a strong position as the second place majority for methods of payment, and many small business owners who believe that setting up electronic points of sale and card payment technologies is too expensive rely on cash for the bulk of their revenue and income. In any case, cash is still predicted to decline in the coming years, so investing in an electronic point of sale machine is something that all small businesses should be considering.

At Berley, London’s chartered accountants for entrepreneurs and small businesses, we have a proven track record of assisting SMEs and startups with growth strategies and improving the profitability of their venture. If you’d like to speak with one of our specialist accountants to see what we might be able to do for your business, including the best practices for setting up electronic points of sale and how this might boost your company’s operation, please feel free to call us on 020 7788 8261 or alternatively, send us an message through our Contact Form.

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