Mike Elliff, CEO, TYL By NATWEST

There is no doubt that the accelerated adoption of digital and contactless payment technology is one of the most important trends to arise from the Covid-19 pandemic.

This acceleration is most often attributed to enforced lockdowns creating a situation where cashfree e-commerce became the only option for consumers. Coupled with heightened hygiene awareness and social distancing concerns, these habits look set to stay and businesses will need to adapt.

However, despite the rising consumer demand for digital and contactless payments, our latest sign-up data shows that 55% of customers registering for the Tyl platform during 2021 are new to card payments. This would indicate there are still many SME’s who are yet to make the switch.

At Tyl we aim to help SME’s across the UK access and acquire as many customers as possible to fuel their recovery from the effects of the pandemic. Whilst we are firm believers in the merits of digital payments, we understand that many small businesses may face challenges in adopting such systems. With that in mind, we have put together some top tips to help address some of the most common concerns and ease the transition into a cashfree future.

Fear of fees

In these early stages of the recovery from the pandemic, for many SME’s an understandable fear is that adopting card payments invites a host of additional fees.

Whilst fees are certainly worth investigating before choosing a payment provider, not all digital payment systems are equal, for example at Tyl, for our smallest customers we offer an all-in-one single price tariff to keep things simple. We don’t have any hidden or premium charges and we don’t charge fees for processing refunds, providing next day settlement services, or for using our portal which helps to track sales and manage your business.

Adopting card payments still presents an excellent opportunity for growth and SME’s should also consider the size of the market they could miss out on by not accepting card payments. For example, our recent research found that more than one in five (21%) UK consumers feel the ability to accept card payments is a key factor in enabling them to support local, independent retailers. It is also a well-established trend that consumers spending on card are more likely to make additional impulse purchases which can help to boost the bottom line.

Adopting digital payments can also help improve cash flow with payments landing in your accounts quicker than traditional cash transactions. Maintaining steady cash flow has been a crucial challenge faced by SMEs during lockdowns. Tyl offers next day settlement terms to help address this.

Security concerns

A second major concern holding SME’s back from adopting card payments is the challenge of processing and protecting customer data.

These concerns are merited and throughout the pandemic we have seen rising frequency of cyberattacks on businesses. For example, according to the Verizon Business 2021 Data Breach Investigations Report, ransomware and phishing attacks on business increased by 11% and 6% respectively.

However, there are some key steps you can take to protect yourself and your customers against criminal activity. The most important of these is to make sure you comply with the Payment Card Industry Data Security Standards (PCI DSS) which protect the card payment industry, consumers and banks from key threats through a unified global policy.

Whilst the PCI DSS is extensive and can be complex, adopting a trusted payment provider such as Tyl by NatWest will ensure that you comply with the standards, as they guide you through the entire process during onboarding. For further peace of mind, you could speak to one of our relationship managers who will be able to explain how Tyl protects your business and your customers.

There are many further steps you can take to manage your business security beyond payments. The aforementioned Verizon report highlighted that 85% of security breaches involved a human element. With workforces operating from home on different networks, often without the security protection provided by office-based systems, upskilling staff and holding frequent conversations regarding threats has taken on new significance.

Where possible, those with the responsibility for security should share examples of malicious activity and how to spot the signs. Clear guidance regarding how to spot and report threats as well as the nature of communications to expect from colleagues can also be particularly valuable.

Businesses should also make sure their customers know exactly how they will communicate with them to help them spot fraudulent correspondence and better protect themselves from criminal activity.

Should an attack break through your security defences, you should also consider how you can minimise the impact that it could have on your organisation.  Having regular data back-up procedures as well as storing files in separate locations on unconnected devices hosted on different servers from the main network are strong solutions as well as ensuring that you have separate computing resources to power a recovery. Having a clear communication strategy to ensure that the right information reaches the right stakeholders in a timely fashion can also be valuable.

Challenge of Chargebacks

The challenge posed by chargebacks has taken on increased relevance as businesses have been forced to move to online operations, often without proper payment processing, tracking and delivery systems in place.

Chargebacks were initially designed to protect card holders from fraudulent activity, providing a mechanism for consumers to secure a refund through their bank for disputed transactions rather than having to deal directly with a merchant.

However, as an unintended consequence, businesses have little power in the event of a chargeback request being submitted by a consumer. Therefore, many businesses are rightly wary of exposing themselves to this potential risk. Understanding the causes of chargebacks is key to reducing that threat, protecting your business and making a switch to digital payments easier.

Chargebacks typically occur in three main ways. They can either be raised mistakenly when a customer forgets or does not recognise a purchase and initiates a chargeback request, through legitimate disputes around delivery and the condition of goods upon arrival or fraudulently in a deliberate attempt to steal from a merchant by keeping goods and services received.

To mitigate these risks, SME owners should always conduct due diligence on the sources of significant purchases, especially transactions requested on non-UK cards or those to be delivered to non-UK destinations.

Another step you can take to protect your business include making use of a pay by link service which sends a secure payment link to a verified account, without having to integrate a full digital payment system.

Other measures include:

• Taking deposits over the phone before processing an order
• Providing timely customer communications on the delivery status of goods
• Making sure your contact details are readily available regardless of whether physical premises are open
• Operating concise return policies that are clearly signposted at purchase touchpoints
• Having a merchant billing descriptor is clearly recognisable to customers on their card statements, helping them to remember their legitimate transactions.

Tyl by NatWest is an innovative payment partner designed to allow businesses to take payments digitally and provide customers with the convenience, service, speed and security they expect whilst supporting business through next working day settlement, 48 hour set-up and fair and simple pricing.