Payments are the lifeblood of any business, but they're especially important for small businesses.
And with the news that over the past 12 months, Main Street merchants have been operating with the lowest risk of closure since the beginning of 2020, how these local merchants and local breadwinners are receiving paychecks from their customers. What people are most interested in is whether they are receiving the same amount of money.
After all, Main Street businesses—those with some kind of physical presence and annual revenue of less than $10 million—are in many ways the engine of the U.S. economy. And the payment mechanisms they accept form the backbone of their own financial operations.
In today's competitive environment, offering convenient payment options can differentiate small businesses from their competitors. By understanding the importance of payments and responding to customer preferences, small businesses can improve cash flow, increase customer satisfaction, and foster growth in an increasingly uncertain and increasingly digital economy. can.
Offering a variety of payment methods beyond standard credit and debit cards and moving to mobile payments can attract customers who prefer a variety of payment methods. Additionally, offering innovations like buy now, pay later (BNPL) and digital wallets can help retain younger generations who are more likely to abandon a purchase if their preferred payment method is not offered. can.
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Face-to-face with customers during payment
Offering multiple payment options and ensuring a smooth payment experience contributes to customer satisfaction, and satisfied customers are more likely to return and recommend your business to others, fostering loyalty and Generate repeat business.
People want convenience wherever they shop, and they have preferences about the payment types they want to use. Additionally, the popularity of digital payments is skyrocketing, with 8 out of 10 Gen Z and Millennial consumers choosing digital wallets and contactless alternatives to traditional payment methods. It's clear: adopting and offering digital payments has become a must for small and medium-sized businesses, especially older ones. Therefore, they may be hesitant to invest in new payment services.
PYMNTS Intelligence shows that small businesses that have been in business on Main Street for more than 20 years experience slower growth compared to younger businesses.
Shopper payment preferences are rapidly evolving, and the lack of growth for more mature small businesses means there is room to learn to innovate to attract more consumer spending and mirror the trajectory of younger businesses. It suggests that there is. Having more payment options is a great strategy. To do so.
Jill Capicchioni, product director of payments at NCR Voyix, told PYMNTS: “There is a huge opportunity for small businesses, mid-market businesses, and even large enterprises to continue moving away from checks and adopting other payment methods.” he said.
Additionally, accepting digital and electronic payments reduces the risks associated with handling large amounts of cash, while also exposing the potential for fraud such as counterfeit currency and stolen checks, which can be devastating for small businesses. is also minimized.
See also: Real-time payments attract small and medium-sized businesses as the new year begins
What small businesses want from payment providers
In “The Main Street Health Survey Q3 2023,” PYMNTS Intelligence examined the preferences of Main Street small businesses and found that PayPal and Square were the most popular payment processors among that retailer cohort, 85% of companies report being very satisfied. Current payment processor. Other prominent players such as Shopify, Fiserv, and Stripe also enjoy considerable popularity.
To differentiate themselves, payment processors are encouraged to offer additional services such as banking, credit, marketing, and data analytics. These services help attract small and medium-sized businesses by offering more than just transaction processing. Data collected from transactions provides valuable insights for small and medium-sized businesses.
“The rich data that can be gleaned from credit card swipes can be used for marketing promotions, understanding customer loyalty and behavior, and even understanding price demand elasticity,” said Charles, vice president of products at the company. Zhu said. Enigma, he told PYMNTS.
“What we've seen is that payments are the entry point, and anyone who serves small businesses from a payments perspective needs to start thinking about payments as a platform for delivering a wide variety of services. That is,” Zhu added.
After all, the landscape of small business payment preferences is rapidly evolving due to technological advances and changes in consumer behavior. As businesses continue to adapt to these changes, the move to diverse and convenient payment options, coupled with the possibility of additional services and insights, is ushering in a new era in small business financial operations.
