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How small retailers can manage the move to the new cashless payment era

After the coronavirus crisis, it seems clear that the future of in-store consumer sales transactions will be contactless payment. Companies that haven’t already adapted will have to invest. Alternative finance can help small retailers afford the shift.

Contactless payment was already gaining significant traction, both in terms of contactless card and mobile wallet use, before the coronavirus hit, but the changes in consumer behaviours forced upon society by the crisis have accelerated its use across all population segments. The move to increase the contactless card limit to £45 per transaction is an indicator of this shift.

The sea change in how consumers pay for products is unlikely to be reversed when the coronavirus crisis comes to an end. Therefore, having the technology to take contactless payments will be crucial for all retailers, from micro stores to large outlets.

Furthermore, the development of contactless payment technology isn’t going to stop at contactless cards and mobile wallet payment. Biometric payment technology is in its infancy but is slowly developing a larger profile. For example, FingoPay, which uses finger-vein technology, has already been trialled in the UK.

One of the main challenges of this accelerated shift in payment behaviour, in particular for small retailers, is the cost of the technology. Payment systems come with a significant price tag and, while larger companies have the resources to manage this evolution, the reality is very different for smaller firms.

Yet, to survive, smaller firms have little choice but to adapt. As such, to achieve this goal and invest in the payment technology that they need, it is vital that business owners are aware of all the funding options available to them, including alternative finance.

Alternative finance offers some clear benefits for small business owners. In the wake of prolonged caution from traditional lenders, alternative finance facilities such as invoice finance, asset finance, peer-to-peer lending and crowdfunding are proving a vital source of capital for small businesses, both for safeguarding cashflow and for essential investment. These facilities, which offer a more personalised approach to lending, are helping small businesses survive and grow.

This is how a small business in Sussex used peer-to-peer lending, through a commercial finance broker that specialises in alternative finance, to raise the capital for new resources.

When the coronavirus crisis ends, the business landscape is likely to look different, including in terms of consumer payment behaviour. Retailers will have to embrace contactless payment technology in a way they haven’t previously. Accessing funding will be vital to achieving this goal, in particular for small businesses, and alternative finance should be part of this financial planning.

To find out more about A&T Business Associates services, contact Tony Hedger on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.

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