U.S. SMBs Say Payment Innovation Is Key Driver of Growth

According to new research, ‘Balancing the Books’, from leading payments platform Paysafe (NYSE: PSFE), an overwhelming 96% of U.S. small and medium-sized businesses (SMBs) accepting in-person transactions plan to upgrade their payments technology in the next 12 months. Despite some economic challenges, SMBs remain optimistic and view payment innovation, including e-commerce, as critical to their future growth as well as overcoming cash flow and fraud issues.

Based on a survey of 1,000 SMBs across industries — from retail, food/beverage to healthcare, construction, auto, beauty/wellness, and professional services — the report reveals that 92% of businesses feel positive about their future. Over half (51%) expect revenue to grow by more than 20% over the next year.

SMBs see payments as a critical driver of growth, with 82% considering a good payment experience a non-negotiable feature. Some merchants place an even greater emphasis on the payment experience, especially those in the beauty/wellness (90%), retail (89%), and food/beverage (86%) industries.

Optimizing the payment experience is closely tied to checkout innovation plans. Over the next year, 52% of SMBs expect to upgrade their point of sale (POS) system to support mobile and contactless payments, with 47% diversifying to include mobile POS terminals.

The same proportion of merchants (47%) plan to integrate their payment systems with another business software. SMBs are laser focused on unifying their systems, with 82% having integrated their payment tech with accounting software, 72% with a customer relationship management (CRM) tool, and 66% with an inventory management system.

Payment security is also top of mind for SMBs, with 77% expressing concerns. There’s no surprise that 47% want to bolster payment security over the next 12 months.

SMBs continue to embrace e-commerce. Today, only 30% 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% of SMBs offering online purchasing, all but 10% have plans to expand this.

Beyond specific plans for next year, SMBs hope to benefit from cutting-edge payments tech. Close to half (46%) see value in instant or real-time payments, while 41% express an interest in ‘tap on phone’ for POS, which converts salespeople’s smartphones or tablets into contactless terminals.

Even artificial intelligence (AI) is catching SMBs’ attention. Three-quarters (75%) believe AI has an important role to play in processing their business’s payments, with even more (79%) emphasizing its value in combating fraud.