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Diversifying payment offerings crucial to future of North American in-store SMBs
Oct 21, 2020
Paysafe research reveals U.S. and Canadian retailers and service providers with expanded online presences and in-store payment offerings have best weathered COVID-19
Houston, Texas – Four fifths (80%) of North American in-store small and medium-sized businesses (SMBs) that have diversified online or enhanced their card-present payment offerings during the COVID-19 pandemic have seen a positive impact, according to research from Paysafe, a leading specialized payments platform. The data released today suggests the SMB space’s future will be dependent on omnichannel payments and technology.
Paysafe’s latest ‘Lost in Transaction’ research, which surveyed in-store retailers as well as dentists, vets, hairdressers, restaurants and other service providers in the U.S. and Canada between September 9th and 18th , 2020, revealed that a large majority of businesses (88%) made at least one change to their checkouts during the pandemic. As a result, 39% reported that their volume of business had actually increased amidst COVID-19. This business uplift was attributed to online sales through either a new or existing offering by 64% of SMBs.
COVID-19 has served as a catalyst for SMBs diversifying online, with almost a quarter (23%) launching an online, card-not-present (CNP) checkout for the first time during the pandemic, adding to the 50% of businesses that already have one. Of the minority without an online presence, 17% plan to add an online checkout in the near future, with only 10% having no such plans.
In terms of limiting physical interactions, SMBs have also focused on enhancing their card-present checkouts, with 44% adding the acceptance of contactless payment on delivery and 44% adding card payment on delivery. Curbside ordering and pickup has also been adopted by 35% of SMBs.
Other innovations included launching an app to enable payments without staff contact (28%) and launching subscription services (18%). Overall, over a third of SMBs (35%) have integrated a completely new payment method due to COVID-19.
Against the backdrop of payment innovation and contagion concerns, acceptance of cash has declined significantly, with 21% of SMBs still not accepting it as an in-store payment method. However, two thirds (64%) of currently cash-free businesses plan to reaccept it in future.
Despite considerable diversification in the North American in-store SMB payments space, many businesses are still facing significant recovery challenges. As a result of the pandemic, 44% of SMBs said their business volumes had decreased, and 93% of these reported that volumes were yet to rebound to pre-COVID-19 levels.
Nonetheless, overall North American SMBs retained a positive outlook, with 76% of businesses stating that they were optimistic about the future of in-store retail and service businesses. However, for the foreseeable future merchants are prioritizing online transactions. Over half (58%) reported that COVID-19 has forced them to refocus their businesses towards online sales and 40% stated they are considering closing their store entirely and becoming online-only businesses.
Afshin Yazdian, CEO of U.S. Acquiring at Paysafe, said: “COVID-19 has had a huge impact on how North American in-store retail and service SMBs view payments technology, and as a result we’re seeing checkouts skyrocket as a business priority. With the rapid growth in online sales methods, as well as the expansion of in-store payment options, the need for diverse, secure, and frictionless payment solutions is stronger than ever.”
He added: “Our research shows that having an online checkout, as well as diverse payments infrastructure, is crucial to allowing in-store SMBs to thrive amidst the pandemic and actually grow in this unprecedented environment. Using technology to maximize opportunities for revenue has never been more pressing for these businesses as they look to navigate a challenging Q4.”
About the research
To compile this data Paysafe commissioned a survey by Sapio Research among 350 businesses that predominately sell products or services in-store based in the U.S. and Canada, between September 9th to 18th, 2020. Of the two markets, 200 retailers in the U.S. were surveyed, and 150 in Canada. All SMBs surveyed had 50 or less employees, with 38% having 1-10 employees and 32% 11-30 employees, and the remainder (30%) 31-50 employees. The top-four sectors surveyed were: retailers (31%); vets, dentists, physiotherapists and other counselling services (13%); hairdressing, nail salons, and other beauty therapists (12%); and restaurants, bars and cafes (11%).
The in-store businesses research formed part of a broader small and medium-sized business (SMB) research that also surveyed 1,100 online SMBs based in the UK, Bulgaria, Italy, Austria, and Germany as well as the U.S. and Canada.
To download the full research: https://www.paysafe.com/lost-in-transaction-how-covid-19-reshaped-smb-checkout/
Paysafe Group (Paysafe) is a leading specialized payments platform. Its core purpose is to enable businesses and consumers to connect and transact seamlessly through industry-leading capabilities in payment processing, digital wallet, card issuing, and online cash solutions. With over 20 years of online payment experience, an annualised transactional volume of over US $98 billion, and approximately 3,000 employees located in 12+ global locations, Paysafe connects businesses and consumers across 70 payment types in over 40 currencies around the world. Delivered through an integrated platform, Paysafe solutions are geared toward mobile-initiated transactions, real-time analytics and the convergence between brick-and-mortar and online payments.
Visit us at: www.paysafe.com
For media enquiries, please contact:
Manager, Corporate Communications, North America, Paysafe Group
Email: Nick.Say@Paysafe.com/ Phone: +1 514 452-8747