As we head into 2019, small business owners have plenty on their plate. Brexit-related economic uncertainty continues to swirl, compounding the usual challenges of staffing, compliance, financial
management and growth. But there are still opportunities for those that recognise the key role payments can play in helping to differentiate and grow the business.
With a trusted provider on board you could benefit from lower costs, improved security, shorter queues and a smoother customer experience: a recipe for success. Let’s take a look at some of the
key trends of the coming year and how they might impact your business.
Confidence among the UK’s SMEs may have taken a tumble towards the end of the year, but there are still reasons to be optimistic about the year ahead. The good news is that there’s never been
more innovation in payments than today. There are mobile, portable, countertop and e-commerce solutions to suit any business. This is important as consumers are increasingly demanding fast, user-friendly experiences with maximum choice to pay via their preferred method.
Younger shoppers in particular are gravitating towards mobile payments. Nearly two-thirds (65%) of 16-20-year-olds told Worldpay last year that they think mobile phones could replace their card in the next five years. With £975 million spent in-store via mobile wallets in 2017, a 328% year-on-year increase, switching on Apple, Google and Samsung Pay could be a good strategy for 2019. Offering a wider choice of payment methods ensures you keep your customers happy. Tap-and-go contactless and mobile payments can also speed up time at the till, minimising queues and potential drop-outs.
Another major trend for 2019 involves new European banking rules known as PSD2 and the UK- specific Open Banking provisions. They’re already helping to usher in a new era of innovation in
online payments by forcing banks to share customer data with disruptive fintech firms. One big win for merchants could be the ability to take payments from online customers direct from their bank account. In doing so, they’ll be able to reduce the payment processing costs associated with card schemes and streamline the process for the end customer to minimise the chance of abandoned baskets.
In fact, even before PSD2 rules kick in, we’re starting to see the market offer this kind of service. It’shugely popular in the Netherlands, where 60% of consumers used it to pay for their last e-commerce transaction. In the UK, Mastercard’s Pay by Bank will be coming in early 2019.
Stay safe in 2019
Amidst all the talk of driving profits and improving the customer payment experience this year, let’s not forget security. Face-to-face card fraud in the UK stood at just £30.5m in the first half of 2018, a drop of 2% from the same period in 2017, thanks to the impact of chip and PIN. But in the online space it’s easier to get away with fraudulent transactions. The volume of online purchases made using stolen cards rose by 5% over the same period to hit nearly £163m.
This makes it important to ensure your payments partner offers integrated fraud screening. In fact, the new PSD2 rules will mandate secondary identity checks online known as Strong Customer
Authentication (SCA). While this will help to root out fraud, it could also lead to drop outs if customers feel like there are to many hurdles to leap during payment. The best solution is to
demand extra authentication only for high-risk transactions. SME owners also need to remember to keep customer card data secure, as per PCI DSS and new European data protection law the GDPR. Using tools like P2PE can help by scrambling card data from the moment it is entered into a reader, reducing your compliance burden and improving security. Be sure to reach out to your payments partner for advice on this and how to drive business success over the coming year.
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