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How mobile payments could unlock growth for small businesses

Small businesses are the powerhouse of the UK economy. Yet despite contributing nearly £2 trillion in annual turnover, times have been challenging of late. FSB figures from September revealed that outgoings for smaller firms rose by an average of 12.5% in the five years to 2016, much higher than inflation (7.7%). That’s not to mention the growing impact of Brexit on consumer spending and inflation. 

Fortunately, there’s something you can do right now to boost your profits and improve the shopping experience for consumers: switch to mobile payments. With very little effort, you could appeal to a growing proportion of the UK population which prefers to pay via their smartphone.

How mobile payments could unlock growth for small businesses

Mobile goes mainstream

Mobile payments have actually been around for quite some time in the UK. Apple Pay was launched back in 2015, for example. Yet for a while they were the preserve of a tech-savvy minority of shoppers. Well, the latest figures prove that this is no longer the case: mobile payments have well and truly gone mainstream.

The combined power of Apple Pay, Google Pay and Samsung Pay have driven up in-store spending via contactless mobile device transactions by 328% over the past year, according to Worldpay figures. The number of transactions hit 126 million last year, exceeding a staggering £975m in value. According to the payments giant a third of the UK’s consumers now use their smartphone’s payment capabilities in shops. Supermarkets dominated (59%) in terms of spending, although pubs and bars (12.5%) were also popular with consumers. Most importantly, shoppers are increasingly using their devices to buy higher value items. Average spend in the second half of last year increased 11% per transaction, thanks partly to the decision by Apple Pay to remove its £30 maximum spend barrier.

It’s not just Worldpay touting huge increases in mobile payment spending. Barclaycard claimed that spending via its Android mobile digital wallet increased 365% year-on-year and spending via its mobile wearable bPay chip grew 129%.

Riding the mobile revolution

In terms of usability, mobile payments are very similar for the consumer to contactless cards, which have also seen a huge surge in popularity in the UK over the past year. That may explain why so many UK shoppers feel comfortable getting their mobile out to “touch-and-pay” in store. But if those stats didn’t get you excited about the prospect of driving higher profits for your business, here are just a few of the key benefits of accepting mobile payments:

  • Boost sales by offering consumers more choice to pay via their preferred method. No-one will ever walk out of your shop because they forgot their wallet/cash
  • Cut queues at the till, minimising lost sales. This is especially important in high volume locations where speed is of the essence, like convenience stores
  • Differentiate from your competitors by putting the customer first with a smooth checkout experience. For smaller firms it’s all about offering a big-store experience for minimal outlay
  • Improve security and lower costs: Mobile payments are more secure than handling cash, and mean you don’t have to store customer card details, reducing your PCI DSS compliance obligations
  • In-app opportunities: Apple pay, Google Pay and Samsung Pay also allow merchants to generate more income from in-app purchases

The future’s mobile

Although the popularity of mobile payments has soared in recent months, this is just the beginning. A recent poll by suggests that 77% of consumers would increase their mobile payment usage if rewards points were offered. As loyalty and payment apps become more prevalent and part of a coherent ecosystem the demand by users to utilise mobile payments will only continue to grow.