Long gone are the days of only accepting payments in cash, especially in the UK. Today’s consumers expect to be able to use their debit card, credit card or even more innovative methods like ApplePay.
Over 13.2 billion transactions were made using a debit card in 2017, making debit cards the most popular payment method in the UK. By 2027, 58% of all payments are expected to be made using a credit card.
While a cashless society may still be a few years away, the UK is certainly heading in that direction with 1 in 10 adults ‘rarely’ or ‘never’ carrying cash. This figure rises to 1 in 6 adults amongst Millennials.
Join us as we explore some of the benefits of accepting card payments as a business and how you can start processing credit card transactions with a PDQ machine.
Advantages of Card Payments for Businesses
Surviving in business is all about understanding your customers' needs and desires. With the UK leading the way as the largest cashless market in Europe, British customers increasingly expect card or digital payment options.
However, some businesses are resistant to make the change as processing card payments can be more expensive than cash transactions.
To help you determine whether you should accept card payments, let’s look at some of the many benefits:
New Opportunities. Many customers refuse to shop at businesses that don’t accept card payments with studies suggesting 1 in 4 customers avoid cash-only companies. So, taking card payments could increase your customer base by 25%.
Easier to Manage Card Payments. According to Which, over the last four years, more than 3,000 banks and building society branches have closed on UK high streets. With bank branches becoming fewer and farther between, finding somewhere to deposit your daily cash takings could become more difficult.
Reduced Risk. Accepting cash increases your risk of counterfeit money as well as theft. Companies with large amounts of cash are more susceptible to robbery as there’s a bigger payout for the theft. As a result, you might find your insurance is a bit cheaper if you limit the amount of cash on your premises.
Impulse Purchases. Debit and credit cards make it much easier for customers to make impulse purchases — cash limits the amount customers can spend and makes them think carefully about their transactions. So, you could see increased revenue by accepting card payments.
Disadvantages of Card Payments for Businesses
While there are certainly some clear benefits of accepting card payments, like most things, it’s not entirely clear cut.
As a merchant, you’ll need to pay a fee for processing cashless transactions, which can eat into your bottom line and is why some businesses avoid card payments.
Not all British customers are onboard with the cashless society concept. After all, 28% of transactions are still made using cash. So, only accepting credit cards could alienate people who prefer to use cash.
Most businesses find a middle ground by accepting credit cards, debit cards and cash.
What is PDQ?
If you want to accept credit or debit card transactions, you’ll need a PDQ machine.
What Does PDQ Stand For?
PDQ stands for ‘Process Data Quickly’ and is essentially another name for a credit card machine, point of sale (POS) terminals or card reader.
What are the types of PDQ Machines?
In the UK, there are four main types of PDQ machines.
Mobile PDQ Machines. Mobile PDQ machines use a mobile phone signal to process cashless transactions. Businesses that often need to take payments on-the-go, like tradesmen or pop-up retailers, might use a mobile PDQ machine. However, as the machine uses your mobile signal to process transactions, you need a strong signal, or you could struggle to accept payments.
Mobile Card Readers. A more advanced version of the mobile PDQ machine, mobile card readers pair with a smartphone or tablet via Bluetooth to connect with WiFi, 3G or GPRS. Micro-retailers often prefer this type of PDQ machine as they’re relatively inexpensive.
Countertop PDQ Machines. Countertop PDQ Machines are one of the most common types as they make it easy for businesses with one location to accept payments. The machine syncs with your POS system and uses an external phone line or ethernet cable to process transactions. Retailers with a fixed checkout typically prefer this type of PDQ machine.
Portable PDQ Machines. Also known as moveable PDQ machines, portable PDQ machines allow retailers to accept payments throughout the store. They use Bluetooth or WiFi to process cashless transactions but have a limited range of around 50 to 100 meters. Portable PDQ Machines are a popular option for restaurants or bars where employees might take payment at a customer’s table.
Image: Example of a Countertop PDQ Machine
How Do Card Payments Work?
With modern PDQ machines, customers can either pay via Chip & Pin or contactless. Some countries, like the USA, still use the swipe & sign method.
What is Chip & Pin?
Chip & Pin technology is typically considered safer and quicker than the swipe & pay method.
Customers insert their credit card into the PDQ machine and enter their unique 4-digit PIN. If the PIN matches the PIN stored on the card, the payment is approved.
The Chip & PIN method has dramatically decreased the amount of revenue lost from credit card fraud by about £81.9 million since it was introduced.
What Are Contactless Payments?
Contactless payments include everything from Apple Pay, Android Pay, digital wallets and even more traditional credit cards. Last year, contactless payments accounted for £7.4 billion, a 31% increase from 2017.
Rather than inserting their card and entering a PIN, customers can tap-and-go. The PDQ machine uses RFID (Radio Frequency Identification) to transmit a small signal, which the card then uses to send the requested information back to the payment terminal.
As contactless doesn’t provide the same security as Chip & Pin, UK customers can only use it to pay for small items under £30 with traditional cards. Technology like Apple Pay or Android Pay allows customers to make payments over this limit.
Is a Cashless Society Possible?
With cash expected to halve over the next seven years and account for only 16% of transactions by 2027, it’s not surprising that modern companies are becoming part of a cashless society. At the very least, accepting card payments means you don’t lose valuable customers and remain relevant.
Superpower Your Cashless Transactions with 365 Business Finance
At 365 Business Finance, you can access funding and support for your business. Our business cash advance makes it easy to secure additional cash flow so you can continue to grow your company, even during slower periods.
If you want to start accepting card payments, you'll need a PDQ machine. Our trusted partners Accept Cards and Card Industry Professionals can provide you with fast, secure, and reliable PDQ machines to fit your business.