One in two UK SMEs (49 per cent) do not accept credit and debit card payments, despite this being the preferred way to pay for 70 per cent of shoppers, according to a study by Barclaycard.

In addition, a third of UK adults (32 per cent) would consider walking away from a retailer if they could not pay by card and a quarter (24 per cent) have done so in the last 12 months, and more than four in ten shoppers (44 per cent) pay by card more frequently than they did 12 months ago with the average UK adult now carrying less than £25 in cash.

The move towards paying by credit and debit card now extends well beyond big ticket items as the average UK adult admits to carrying under £25 in cash, with more than a third (37 per cent) carrying less than £10. Despite this trend, however, 17 per cent of small businesses admit they have no plans to introduce electronic payment options any time soon – meaning they are potentially losing out on sales to their more technologically savvy competitors.

> See also: Taking card payments – everything you need to know (eBook download)

Nevertheless, SMEs do acknowledge that failure to accept a range of payments is putting their business at risk, with two thirds (64 per cent) recognising that choice is important to their customers. Over a fifth (21 per cent), however, have put off installing electronic payment terminals because they believe it is too expensive, while one in ten (11 per cent) worry that the process would be too difficult to set-up.

The need to pay quickly and easily

It seems that today’s time-poor, busy shopper wants to pay quickly and easily and SMEs that don’t capitalise on this demand are likely to miss out on an increasing number of sales each year. Yet small businesses can easily buck this trend by taking credit and debit card payments, which contrary to the concerns of some, are simpler and more cost-effective to set up than ever before.

Doron Cohen, CEO of Covercy, a cross-border business payments service says that, nearly five years on since the Bank Of England last introduced a new banknote, the benefit of circulating a new five pound note now is quite questionable, due to the payments revolution currently underway in the UK.

‘Britain is well on its way to becoming a cashless society, as last year, for the first time, notes and coins were used in less than half of all payments,’ he says.

A key driver in this has been the adoption of contactless cards, with monthly spending by this method reaching a record £1.5 billion this year, roughly three times the level of 2015, he adds.

Related: Which card payment machine should I get for my small business?

Cashless institutions

Not only this, some long-standing British institutions are actually becoming cashless too, such as Transport for London, which banned cash on the buses in 2014 and has saved £24 million in cash-handling costs already.

‘From a security point of view, banknotes are a nightmare due to being untraceable, with at least half in circulation being used for a range of illegal activities,’ Cohen says.

‘UK businesses bear the brunt of this problem, with over 240,000 counterfeit notes being discovered last year alone. The financial powers-that-be should focus future initiatives instead on helping contactless to grow further, especially amongst businesses in the UK.

‘Moving to a cashless society has immense benefits for British firms as such payments are fully traceable, secure and also decrease the risk of money laundering.’

Boost Capital provides funding to small businesses to update their payment terminals. And with Boost Capital’s MCA product designed exclusively for businesses taking card payments, you only have to pay when you get paid (linked to card sales).

See also: How to take a card payment over the phone using a virtual terminal