With less two months to go before August 1 when chip and pin technology will be mandated across all card payments terminal in Australia, research by PayPal Australia has revealed less half of small to medium enterprises (SMEs) are prepared for the change.
The Small Business Payments Research showed that 54 percent of Australian SMEs do not accept chip and pin credit and debit payments, despite the fact that signature verification in Australia is being phased out.
The research also showed 36 percent of SMEs who currently accept credit card payments say they do not accept chip and pin payments, with 64 percent of SMEs responding they don't know what chip and pin technology means, despite the fact that credit card payments are the second most common payment method used by customers
"We need to ensure that Australian small businesses are armed with the technology and resources needed to adapt to the new payment landscape and can keep up with the shifts in consumer behaviour at the checkout," Andrew Rechtman, PayPal Australia senior director of SMB, retail and strategy said.
The findings of the research also indicated there will be a decline in cash payments, with six in 10 SMEs agreeing that cash-only businesses will be a thing of the past, and that 61 percent prefer to avoid too much cash in their business as it increases the likelihood of theft. Customer preference for credit and debit card payments is driving this prediction, with 87 percent SME owners agreeing that people now want to use credit cards for much smaller purchase amounts.
Instead, a majority (57 percent) of SMEs believe mobile payments will make up a larger proportion of their business in five years time, but only 11 percent have purchased a device to allow them to accept smartphone card payments.
"The smartphone has well and truly become the mission control device for running a small business, yet many SMEs still haven’t taken up the opportunity of a mobile checkout," Rechtman said.
"Australian businesses are now able to set up shop almost anywhere, operating from market stalls, ute trays, garages — wherever their customers may be."
The results come as PayPal announces the general availability of its second generation of PayPal Here, an app and Bluetooth enabled chip and pin card reader to allow business to accept credit and debit card payments, as well as to generate and distribute invoices and send receipts.
PayPal Here was initially launched two years ago as a card reader that accepted signatures for verification, but now with the incoming mandate, the company was forced to specifically design its latest reader for Australia to meet the new requirements.