Matt Cockayne, chief commercial officer at Yapily offers advice for retailers wishing capitalise on Black Friday and Cyber Monday:
Black Friday and Cyber Monday will see a huge amount of online sales, as lockdown and social distancing rules remain in force across the UK. The Centre for Retail Research (CRR) expects total online sales to rise 52.9% from £3.771 billion (2019) to £5.764 billion this year. But while this rise in online payments should be encouraged, it again puts a spotlight on the monopoly card networks hold over payments. It’s expected that Visa and Mastercard will pocket at least £57.6m from this period from processing payments for retailers and small businesses. And that’s just based on a 1% fee, which in some cases is even higher.
Retailers are beyond frustrated with the duopoly of Mastercard and Visa – as highlighted by the British Retail Consortium time and again. It’s high time we had a fairer way of processing digital payments. One that doesn’t squeeze already hard-done by retailers. We need to enable more payments through Open Banking.
With Open Banking, the merchant’s bank deals directly with the consumer’s bank, getting rid of unnecessary middlemen. This means payments come at a fraction – up to 88% cheaper – of the cost of traditional card fees, representing significant savings for businesses. Not only can these savings be passed directly onto customers, or reinvested into the business, but Open Banking offers a better user experience, and enhanced security, which will help increase online conversion rates.
“As businesses look to rebuild in 2021, we need to do everything we can to help them maximise their profits. And changing the way they receive payments is a simple change that can make a lot of difference.”