Unlocking business profitability through card payments

By Steve Paul, above, Deputy CFO, Equals Money

In today’s fast-paced environment, small businesses can’t afford to be weighed down by outdated invoicing methods which take up time, money, and resources. The solution? Card payments. By making the transition to card payments, SMEs can unlock their full potential.

Card payments – what are they?

Card payments refer to transactions made using a payment card, such as a credit card, debit card, or prepaid card. Over the past decade, card payments have exploded in popularity and become one of the most widely accepted methods of making purchases, both online and in physical stores. In fact, in 2021 alone, 40.4 billion payments were made using cards in the UK, making up 57% of all payments that year. This is a figure only expected to grow over coming years and by 2031 is projected to account for 61% of all UK payments.

The benefits of card payments for SMEs

In 2021, businesses made over 5.5 billion payments using cards, a 14% increase on the previous year. Of these, 3.3 billion were business to business payments, the rest accounting for business to individual transactions. So, why are we seeing a rise in card payments?

Convenience:

SME Publications/ SME XPO 2024

Card payments offer significant convenience for SMEs compared to traditional payment methods like invoicing. Firstly, card payments facilitate immediate transactions, eliminating the need to wait for invoices to be generated, sent, and processed. This streamlines the payment process and accelerates cash flow, ensuring timely funds for business operations.

Accelerated time and cost savings:

As well as allowing money to be moved more quickly and freely, card payments reduce the burden of manual record-keeping and accounting tasks. Invoicing requires meticulous tracking of invoices, follow-ups, and reconciliation, which can be time-consuming and prone to errors. Card payments, on the other hand, offer automated systems that integrate seamlessly with accounting software, simplifying financial management for SMEs.

Illuminated payment visibility:

Through using a card payment provider with an online platform like Equals Money, businesses can gain clarity and insights into their financial transactions and monitor and assess payments in real time.

Having visibility over business spend is vital for SMEs to stay on top of finances and forecast cash flow. This is crucial for ensuring smooth day-to-day operations, timely payments to suppliers, and the ability to seize growth opportunities.

Fortified finances:

SMEs are particularly vulnerable to fraud due to limited resources and often operate with fewer internal controls and security measures than larger organisations. The financial impact of fraud can be devastating to smaller businesses, potentially leading to significant financial losses, disruption of operations, and damage to reputation.

Card payments can offer SMEs crucial protection against fraudulent activity. With robust security features like chip-and-PIN technology, encryption, and fraud detection systems, card payments reduce the risk of unauthorised transactions and counterfeiting. Liability protection measures further safeguard users from financial losses.

Additionally, card providers with online management platforms allow cards to be cancelled or paused instantly if suspicious activity occurs or a card is suspected as lost. Many of these platforms also allow the cards to be un-paused or replaced from the same place. By relying on card payments, SMEs can make securer payments and better protect their finances from the impact of fraud.

Seize every opportunity:

Accepting card payments allows for greater customer accessibility and enhances sales opportunities. As more consumers increasingly prefer the convenience of card payments, SMEs that offer this option are better positioned to attract and retain customers, ultimately boosting their competitiveness in the market. Additionally, card payments allow SMEs to seamlessly handle both large, recurring payments in addition to one-off smaller needs allowing the versatility and flexibility needed to adapt and grow.

The convenience, security, and efficiency of card payments make them an invaluable tool for SMEs, empowering them with faster transactions, streamlined accounting processes, and better visibility and insights for growth.

For more information on cards payments, contact Equals Money at [email protected].

SME Publications/ SME XPO 2024