Small firms stuck in 20th century payments land

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Two in five small businesses in Scotland have never reviewed how they take payment from their customers and remain stuck in the 20th century, a new survey suggests.

PayPal has claimed that small firms are losing sales by limiting themselves to traditional forms of payment such as cash, bank transfers and cheques, after the digital payments firm surveyed hundreds of businesses and consumers.

It found that 44 per cent of small businesses in Scotland have never reviewed how they receive payments, despite the "radical" changes of the 21st century being embraced by consumers.

Two thirds of Scottish consumers are shopping differently today than they were 12 months ago - choosing, for example, to shop on their smartphones rather than in-store, paying via a digital wallet or using contactless payments.

For small businesses north of the Border doing trade in person, cash (76 per cent), bank transfer (64 per cent) and cheques (60 per cent) are still the methods of payment most relied upon, despite contactless card payments overtaking cheque books for the first time this year. These figures are even higher than the UK national average of cash (70 per cent), bank transfer (62 per cent) and cheques (56 per cent).

Nicola Longfield, director of small business at PayPal UK, said: "For small businesses, understanding the number of new ways to take payment may seem daunting. However, consumers are embracing these changes and opting to use digital wallets, contactless cards and their smartphones when they go shopping. Businesses that don’t join the 21st century stand to lose out."

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