Brief boom for small businesses

2010-06-09 13:13

The World Cup and a more buoyant mood among South Africans and

noticeably more visitors in cities and major towns was seeing a welcome boom for

small retailers and businesses battling with a slow economy.

Paul Kent, managing director of SureSwipe independent credit card

swipe machine distributors said: “Small businesses really needed the injection

of optimism and spending that the World Cup is creating.

“Although we had seen a pick up this year in terms of more cards

being swiped, the amount being spent was down and generally businesses were

battling with a noticeable increase in fraud and often disaffected workers

because of low salary increases and a freeze on bonuses and overtime in many

companies.

“Suddenly, we are seeing a confident upsurge of positive energy and

spending that is definitely connected to the positive vibe created by the World

Cup,” he said.

SureSwipe’s findings echo those of others. Alexander Forbes Risk

Services have reported an upsurge in commercial crime.

Forbes spokesperson Brian

Gillespie said: “Reduced turnover and profits in 2009 saw cut backs in salaries,

no wage increases and the scrapping of bonuses, pushing many employees to seek

alternative sources of compensation, often by stealing from their

employers.”

The increase in claims for commercial crimes first noticed in July

2009 continued into 2010, resulting in insurers firming their renewal terms on

commercial risks.

Gillespie said that more risks, including internet fraud, were

being written on the broader form commercial crime wording as opposed to the

traditional fidelity wording.

He said: “This extends to far smaller businesses where insurers are

now prepared to consider a block of insurance business within a particular range

at comparable rates.”

Kent said: “We have helped small businesses combat commercial crime

with anti-fraud training workshops for staff, better risk-assessment skills, UV

lights to detect fraudulent cards - which tend to be a particular problem with

foreign cards and rapid support in the event of technical problems.

“We have also given stores anti-fraud stickers so that shoppers can

feel confident that the store has taken measures to prevent fraud on their

cards, but too it is a deterrent to criminals who are less likely to try and

defraud those with an arsenal of anti-fraud equipment and training.”

Kent said that while SureSwipe was seeing a surge of new business

and had been a finalist in the fastest growth category of the recent National

Business Awards: “we are concerned at high levels of debt among consumers and

small businesses which are mirrored in worrying statistics.”

The most recent government statistics show a 2.7% increase for

civil summonses issued in respect of money lent and promissory notes and other

acknowledgements of debt contributing 1.3 percentage points (this category

includes credit card debt).

Kent said: “What we can expect to happen is a slow down in credit

card expenditure as more people stop using credit cards or go under debt review

and are compelled to use debit cards only.”

Statistics show that the total number of civil judgments recorded

for debt for the three months ended February 2010 increased by 3.8% compared

with the three months ended February last year.

Civil judgments in respect of money lent (contributing 5.5

percentage points), promissory notes and other acknowledgements of debt

(contributing 3.8 percentage points) and professional services (contributing 1.4

percentage points) were the main drivers behind the 3.8% increase.

Kent said: “A successful World Cup is important not just for sports

fans but the whole economy.

We are literally balancing at present on a cusp that

could lead to hard economic times if it falls in one direction or could push the

economy ahead if the World Cup is a success.”


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