HOW SMEs CAN EMBRACE CONTACTLESS, WITHOUT DITCHING CASH

By Tsuyoshi Notani, Managing Director, JCB International (Europe) Ltd.

 

Already popular, the past year has accelerated the usage of contactless payments in lieu of cash transactions – even for very small purchases. As well as using cards with contactless abilities, the ease of using digital wallets such as Apple Pay has increased take-up across the UK, representing 32 % of online payments[1]. Digital payments have the advantage over notes and coins at point of sale because it facilitates a more hygienic experience and speedier transaction.

Meanwhile, in the UK, the contactless cost limit has been raised from £ 45 to £ 100 for a single ‘tap and go’ transaction, compounding moves by consumers to rely on contactless as the payment mechanism of choice. In fact, Link Scheme Holdings Ltd, which oversees the UK cash machine network reported that the number of visits to ATMs dropped by 43 % for the year to March 2021 on the previous year[2], although it does note that some ATMs may have been inaccessible due to pandemic restrictions.

The appetite for paying without cash is huge – and we know that a large proportion of cashless payments are also contactless. For SMEs this can present a challenge. Providing multiple ways to pay can be an administrative obstacle, and often SMEs prefer to operate with cash only, to avoid incurring additional fees and costs. However, there is good reason to offer digital payment methods alongside cash.

Business benefits to offering contactless payment solutions include reduced costs associated with cash handling, and the convenience for customers in offering multiple ways to pay for goods or services. It is also a very secure way to receive payment. A simple and fast way to transact, contactless is the ultimate convenience for customers. For retailers competing in today’s landscape, it is essential to ensure that customers have access to their preferred payment method.

However, this must not come at the total exclusion of cash until a solution has been found for the ‘unbanked’ – those without access to digital payments for one reason or another. For now, solutions are nascent, and SMEs looking to reach all potential customers would do well to offer cash payments but also enable cashless and contactless. For SMEs who increasingly find themselves faced with competition from mega entities, focusing on a convenient and frictionless customer experience is paramount.

At JCB, we take financial inclusion seriously, recognising our role as a key player in the global financial ecosystem to ensure nobody is left behind by the digitisation of payments. We, for example, partnered with FE Credit, to launch two credit cards in Vietnam that are packed with benefits to meet the needs of the unbanked. A few examples of these unique offerings are the Oi Plus Program – a flagship loyalty program that rewards cardmembers on their everyday spending, and EasyPay – one of Vietnam’s largest 0% retail installment programs, and Selfie PLUS – one-click mobile-to-card image upload solution[3].

Luckily, the ‘how’ in enabling contactless and cashless payments is very simple. When picking a card reader, ensure you choose one created by a company which enables multiple cards, as this will enable your business to accept a wide spectrum of payments – and means no sale is lost because of an issue around how to pay. From a JCB acceptance point of view – Lloyds Bank plc, Barclays plc, and Zettle all accept JCB Cards in the UK. Viva Wallet, which supports around 80,000 merchants in Greece, more than 3,000 merchants in Belgium, and more than 6,000 merchants in the United Kingdom and beyond also accepts JCB Card payments[4].

Losing out on customers who do not carry cash is a no-go for SMEs looking to build back business after a difficult year. Enabling card and contactless payments is a surefire way to appeal to customers looking for convenience, removing one big obstacle to purchase for the on-the-go shopper. That is why at JCB, we encourage SMEs to both enable contactless, and accept cash – for the biggest opportunity to enable purchases and to ensure nobody is left behind.

 

[1] WorldPay, The Global Payments Report February 2021 https://worldpay.globalpaymentsreport.com/en/

[2] BBC, ATM withdrawals drop by £37bn during year of Covid 17 March 2021 https://www.bbc.co.uk/news/business-56413993

[3] FE Credit to Issue JCB Card in Vietnam, 19 November 2020, https://www.global.jcb/en/press/2020/202011180001_alliance.html

[4] JCB and Viva Wallet’s Expanded Collaboration Across Europe, 25 August 2020, https://www.global.jcb/en/press/2020/202008240001_alliance.html

 

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