Small and medium sized enterprises are missing out on an estimated £1.6 billion by not accepting next generation payments technology such as one-click ordering and 'conversational' transactions, according to research from Barclaycard.
The figure is extrapolated from a survey of 2010 Brits, who were asked to estimate the total number of times that they abandoned a payment over the past year because a specific 'next generation' payment method - such as in-store invisible payments, online invisible payments, conversational payments, and cryptocurrencies - was not available.
Nearly half of millennial shoppers are opting to pay using next generation payment tools, with 29% ditching a purchase they couldn't pay for with one of these options. Among all ages, 15% have abandoned transactions.
Nearly one in four small retailers admit they have lost customers because of a lack of emerging, but increasingly popular payment options - rising to two thirds when modern technology such as contactless, online payments, mobile and wearable devices are taken into account.
With over a fifth of millennials keen to use next generation ways to pay more frequently, the findings indicate that innovation is increasingly important for SMEs if they are to keep their appeal with younger shoppers, especially as their spending power increases, says Barclaycard.
Although almost three in ten SME retailers have plans to update their offering in the next six months, a fifth do not think they need to introduce invisible payments. This is despite the fact that 27% of 18-34 year olds predict that invisible payments will become the most popular form of payment in the next five years and over half believe cash will eventually become redundant.
What’s more, far from embracing these cutting-edge methods, a significant proportion of SME retailers are also still to introduce mainstream electronic payments technology such as contactless. Despite September marking 10 years since Barclaycard first launched contactless in the UK, a quarter of smaller in-store retailers are yet to introduce this form of payment.
Greg Liset, head, small business, Barclaycard, says: "Our figures show that SMEs are losing sales by not adopting increasingly popular technologies that facilitate invisible and conversational payments. While it’s encouraging that many smaller retailers are becoming aware of the importance of these emerging methods, they need to turn this ambition into action to steal a march on the competition and keep up with consumers both now and in the future."