A huge 96 per cent of US small and medium-sized businesses (SMBs) accepting in-person transactions plan to upgrade their payments technology in the next 12 months, according to a recent study from payments platform Paysafe.
Despite economic challenges, Paysafe reveals that a large proportion of SMBs remain optimistic and view payment innovation as critical to their future growth, as well as overcoming cash flow and fraud issues. This optimism means that 92 per cent of businesses feel positive about their future. Fifty-one per cent also expect revenue to grow by more than 20 per cent over the next year.
SMBs see payments as a critical driver of growth, with 82 per cent considering a good payment experience a non-negotiable feature. Over the next year, 52 per cent of SMBs expect to upgrade their point of sale (POS) system to support mobile and contactless payments, with 47 per cent diversifying to include mobile POS terminals.
Payment security also remains important for SMBs, with 77 per cent expressing concerns. For this reason, 47 per cent want to bolster payment security over the next 12 months.
Rob Gatto, chief revenue officer at Paysafe
“Small and medium-sized businesses have long played an essential role in the American economy, and it’s great to see in our new research report that SMBs’ positive outlook is underpinned by their strong belief in the value of payment tech and e-commerce,” commented Rob Gatto, chief revenue officer at Paysafe. “Whether it’s upgrading their point-of-sale terminals to support mobile and contactless payments, expanding into online sales, or improving transactional security, payment innovation is enabling SMBs to strengthen the customer experience and ultimately increase revenue to better manage cash flow issues.”
SMBs continue to embrace e-commerce. Only 30 per cent of SMBs don’t sell online, but two-thirds of these holdouts plan to diversify into e-commerce within the next 12 months. Of the 70 per cent of SMBs offering online purchasing, all but 10 per cent have plans to expand this.
Future focus
Beyond specific plans for next year, SMBs hope to benefit from cutting-edge payments tech. Around 46 per cent see value in instant or real-time payments, while 41 per cent express an interest in ‘tap on phone’ for POS, which converts salespeople’s smartphones or tablets into contactless terminals.
Unsurprisingly, artificial intelligence (AI) is catching SMBs’ attention. Seventy-five per cent believe AI has an important role to play in processing their business’s payments, with even more (79 per cent) emphasising its value in combating fraud.
Due to their vulnerability to cash flow issues and slow payment settlement times, SMBs are intensely focused on payment innovation. A third of SMBs (32 per cent) cite payment settlement delays as a major cash flow disruptor, rising highest (37 per cent) among larger merchants. As a result of cash flow challenges, 42 per cent of all SMBs have had to delay paying vendors or their own employees.
Paysafe argues that there’s no room for complacency from PSPs, with 60 per cent of merchants encountering a payment processing issue at least once a month. Aside from failed payments, SMBs identify chargebacks and disputed payments (an issue for 30 per cent) and high interchange fees (48 per cent) as their biggest processing challenges.
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