Start-ups are driving the use of new payment technology, with SMEs under three years old much more likely to be tech-savvy than older businesses, reveals new research from global payments provider, Streamline.
The research shows start-ups are leading the way in e-commerce, with almost two thirds (58%) offering it as a sales channel compared to less than half (46%) of SMEs in general.
Additionally, one in two (50%) start-ups are trading using online and mobile wallets, compared to just 36% of business that are over three years old. This number rises to 68% when looking at card-accepting start-ups, suggesting that businesses that accept credit and debit card payments are most likely to adopt other innovative payment methods.
The research also shows an increasing number of start-ups are offering contactless payment methods in store. This is likely to be a result of growing consumer demand for the technology. In Streamline parent, WorldPay’s recent Omni:Payments report, of the consumers currently using contactless, 88% said that it is ‘quick and efficient’.
Meanwhile, as more advanced sales channels grow in popularity, more dated channels are quickly dying out. Just 49% of start-ups are now accepting telephone orders compared to 63% of older businesses. Start-ups are also less likely to accept payments by cheque (74% compared to 84% of SMEs in general).
The research has highlighted how the attitudes of start-up owners towards technology differ from more established SMEs with 28% of start-up directors saying they “must have the latest technology” compared to 20% of established SME owners.
Commenting on the findings, Robin Mackenzie, head of small Bbusiness at Streamline, said: “Start-ups today are under intense pressure to have a clear point of differentiation and quickly drive revenue into the business. It is understandable then, why business owners might be more amenable to payment channels that increase spend, access new customers or improve the purchasing experience, whilst keeping costs and admin time to an absolute minimum.
“As our recent Omni:Payments report showed, start-up owners’ approaches correlate to the changing attitude of consumers about how they want to pay for goods. The report showed that the public are driven by a need for speed and will often choose technology over personal interaction, an approach which is fuelling the uptake of new payment methods. It has, therefore, become essential for small businesses to change with the times and give the public not just the best price, but also the best payment method.”
London-based hat boutique, Atelier Millinery, is a start-up which has excelled by becoming more tech-savvy. Owner Georgina Abbott said: “Understanding and using the relevant technology was essential to us from day one. As the business grew, there was a lot of customer demand for a more complete multi-channel experience. Having a website has significantly increased bookings for the brand’s creative courses and there are also options for advanced fraud screening, multi-currency transactions and to let customers pay deposits for bespoke orders, all of which are very useful. All major credit and debit cards are supported, as well as mobile wallets, and customers can visit the website from any mobile device too.”