Celebrating the people behind British small businesses

How to boost your business using mobile payments solutions

Andrew Byrne, COO of myPOS, explains how cheaper, quicker payment systems can insulate retailers from cash flow problems.

Recent news that Toys R Us has gone bust confirms the tough time retailers have been having recently. The toy retailer went into administration in January but no buyer has been found, leading to the loss of 2,000 jobs.

The chain was far from the only retailer to have run into problems. Others including Carpetright, Mothercare and New Look have been trying to head off trouble by reducing their store presence.

It’s a theme we have been seeing for a while – predominantly offline retail businesses are trying to lower overheads in an attempt to compete with their online-only rivals.

But despite the difficulties, plenty of people see a future for themselves as retailers. Recent research by Aldermore found that just over four million Britons plan to become self-employed within the next three years, with 600,000 of them planning to become retailers.

The vast majority of these will become owners of small retail operations, perhaps following a passion they have had for years. How they will fare, and whether they are able to avoid the fate of brands like Toys R Us, depends to a large extent on how they are able to handle their cash flow.

In the same piece of Aldermore research, 40% of self-employed people said they had experienced difficulties managing cash flow – primarily because of the challenge of getting paid what is owed to them by customers.

The role of mobile payments technology 

This is why developments in new mobile payments technology are proving so important, helping small retailers get paid quicker, whilst minimising overheads at the same time.

These new integrated tech solutions are providing retailers with instant access to their funds when accepting card payments, unlike the service offered by the banks, which typically require businesses to wait three days for funds to clear.

Retailers don’t have to commit to costly rentals or fixed contracts either; they only need to buy a terminal. This is also important as many new retailers operate, at least at the beginning, more like ‘pop-ups’, aiming for a nimble style of business until they have tested the viability of their idea.

New payment systems enable these retailers to not only have the confidence that they’ll be paid instantly, but also dodge costly commitments until they have built up a more sustainable revenue base.

These more advanced solutions also allow retailers to offer customers a variety of extra services, such as mobile phone top-ups, which help drive additional revenue and footfall.

All of this is not before time – a recent ruling by the EU dictates that retailers are no longer able to pass the cost of card payments on to the customer– which could mean raising prices or a refusal to accept card payments. Neither of these options feel like anything a forward-looking business owner would want to consider.

In fact, being able to offer payments by card is increasingly going to become the service that customers expect as a minimum. Although many small businesses are currently getting around the charges and cash flow issues by only accepting cash payments, the evidence suggests that this policy is going to become increasingly unsustainable.

For instance, research by consumer organisation Which? found that many rural communities are already suffering from the lack of access to ATMs, meaning that only local businesses that are offering card payments will attract business in these areas.

Small businesses seizing opportunities

But facilitating better card payment processing for retailers isn’t just about keeping them in business.

These more agile systems can help small operations get off the ground in the first place, giving them the confidence that they can set up operations with minimal outlay. It’s no overstatement to say that the new generation of mobile payment systems are helping to ensure that this country remains a nation of shopkeepers.

Research suggests that the headline-grabbing high street woes aren’t preventing entrepreneurs turning to retail. As new mobile payments technology continues to democratise the sector there’s a huge opportunity for a wide range of businesses and entrepreneurs to navigate challenges and seize new opportunities.