Update: Four out of 10 of the UK’s micro businesses do not accept card payments, according to payments provider Square.
This compares with almost 9 out of 10 businesses with between 10 and 249 employees – the definition of what constitutes an SME.
Square’s research has found that 56pc of shoppers aged between 25 and 34 prefer paying by card, and 47pc of shoppers overall.
Jack Dorsey, CEO of Square, told the Daily Telegraph that payments technology could save small businesses now that consumers are turning away from cash.
“The real challenge is keeping small businesses in business,” Dorsey said.
Square also found that micro-business owners are more than twice as likely to have had a loan application rejected, compared with other SMEs.
Dorsey, who is also chief executive of Twitter, said he is convinced there is a future for bricks-and-mortar businesses on the UK high street.
“There are going to be a lot that moves on but the pub isn’t going to move on and restaurants aren’t going to move on,” he said. “There are lots of businesses that won’t be served by Amazon. In the worst case this will push some businesses to be a lot more creative. It will never get rid of the physical spaces that we love to hang out [in].”
Square is targeted at micro businesses, those employing fewer than 10 people, enabling them to offer card payments in store with accompanying valuable consumer insights via a tablet or smartphone.
So-called “micro businesses” make up 96pc of all companies and account for 33pc of all employment in the UK but are increasingly under pressure due to lack of funding and ailing footfall, the report from Square has claimed.
Square has established partnerships in communities across the UK, helping local businesses accept digital payments. The first, in the town of Holywell, North Wales, resulted in 95pc of high street shops accepting card payments, many for the first time. The payments provider has also partnered with businesses in Batley and Spen in Yorkshire, Darwen in Lancashire, Bishop Auckland in County Durham, and Rochford in Essex.