Are bank branch closures affecting your business?
As bank branches close, card payments could be your gateway to new business.
Over the last 12 months, in excess of 600 bank branches have closed their doors for good in the UK. The closures happened between April 2015 and April 2016, hitting rural areas the hardest, according to figures obtained by BBC Breakfast.
The statistics come from the six largest high street banks: Barclays, Co-operative, HSBC, Lloyds, Royal Bank of Scotland (RBS) and Santander. According to the banks, the frequency of branch closures has increased as more people switch to online banking in favour of traditional methods.
Areas of Wales, Scotland and the South West of England have lost the most bank branches per head of population, with the top 5 locations all in Wales: Powys, Denbighshire, Gwynedd, Conwy, and Carmarthenshire.
Around 3,000 bank branches have closed over the last ten years, according to the Campaign for Community Banking Services. As well as rural areas, many other closures have affected commuter towns, where customers are more likely to bank closer to their workplace, or online or telephone banking.
A spokesperson for HSBC said: "The way we bank is changing very quickly, and with an increase in the use of online and telephone banking over the past few years, use of branches has fallen significantly."
Transactions in branches were down 6% over the last year, compared to online banking which currently sees around 9.6 million daily log-ins – according to The British Bankers' Association.
There have been campaigns against closures that argue losing a bank branch can be devastating for a smaller community.
Although sometimes smaller ‘local’ businesses can be reticent to fully commit to updated forms of banking and payment due to low transaction usage or perceived costs for services, there are some sizeable benefits worth considering with regards to the acceptance of digital forms of payment:
Payment hurdles faced by a rural SME:
1. “I don’t have high-speed internet access at home, let alone for my business. Nobody does in this town. How would I connect a card terminal?”
Although Wi-Fi is a secure connection for receiving card payments and can benefit certain business types, not all card terminals require it. Our most popular, cost effective and reliable terminals simply need a telephone line to establish a connection. It may not remedy all of your online banking challenges, but it will give you control over a specific and potentially large portion of your business.
2. “Everyone knows me and my customers know I don’t take cards, they’re happy to continue dealing in cash.”
If you’re in an area affected by bank closures, it’s likely that your local customers will also be affected. With less branch resource for your customers, offering them an option for card payment as an alternative is more likely to convenience you both and could even increase your revenue from impulse purchases and upselling.
3. “Adopting so much change in my business will not only take time, but I’ll inevitably incur debit and credit card processing charges that I don’t currently have to worry about.”
There are costs associated, as with all service providers, but did you know manually paying cash into your business account over the counter can incur steep charges of its own? Also consider the cost of getting to the bank, cash in transit and the cost of your time. There are products available that allow you to receive the days takings into your account on the same day. With a card terminal you may also end up worrying less in other areas of the business, like security; with reduced cash handling on the premises and a more secure payment method.
Note: Basic banking is still available at the Post Office, which offers a larger network than all the high street banks combined.
Source: BBC News.