Survey Shows SMBs Relied on Digital Payments to Survive 2020

ETA/TSG Survey Finds Fewer SMBs Experiencing Sales Decrease in 2021

A new survey of small and midsized businesses (SMBs) conducted by the Electronic Transactions Association (ETA) and The Strawhecker Group (TSG) found that 43% of SMBs see digital payments as more important to their business now than before the COVID-19 pandemic. As SMBs begin to recover, 38% report an increase in sales since the beginning of the pandemic, and fewer SMBs are experiencing a decrease in sales (38% in 2021 vs. 47% in 2020). 

Consumers and Merchants Embrace New Ways to Pay Due to COVID
Conducted in April 2021, the survey revealed a notable shift during the pandemic in the ways in which consumers pay for goods and services. Digital wallets are now accepted by 44% of SMBs and are the third most common way to pay after cash (64%) and credit/debit cards (70%).

Since April 2020, over a quarter of SMBs have added a new sales channel, compared to 18% just a year ago. Merchants have incorporated services such as buy now/pay later (BNPL) options (13%), mobile applications (26%), in-store contactless payments (30%), ecommerce solutions (15%), and online delivery and pickup (17%) features to reach new and existing customers.

“The digital transactions industry continues to serve as a valued partner to SMBs,” said Jodie Kelley, CEO of ETA. “Payments partners are helping businesses innovate to meet their customers where they are at by offering new products and services for safe and seamless transactions.”

Contactless Payments Help SMBs Stabilize Sales
Contactless payments, the ability to pay via a contactless card or mobile wallet at the point of sale, continue to see an increase in adoption by consumers and merchants: 34% of merchants state they are experiencing an increase in contactless payments, up 7% over the previous year. Of note, the survey results point to a shift toward merchants’ willingness to embrace contactless payments, with more respondents being receptive to adding contactless payments.

“Our survey found that SMBs are implementing new strategies to meet customers’ desire to pay in a safe way,” said Mike Strawhecker, President at The Strawhecker Group. “Payments technology continues to be a key strategy as more businesses implement new sales channels, products, or efforts to stabilize their business.”

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About TSG
The Strawhecker Group (TSG) is the largest analytics and consulting firm focused on the payments acceptance industry. TSG serves the entire payments ecosystem and has experience in working on large-scale projects for the world’s biggest payment players. The firm has worked with all card networks, nine of the top ten merchant acquirers in the U.S., as well as leading private equity firms and investment banks.