Stay Connected

Get the latest tech insights delivered straight to your inbox

The Number One Thing Every Small Business Can Do To Thrive Now

If you want to survive and thrive in a small business during the pandemic, the number one thing you can do is to pivot to a digital-first mindset. 

That’s the upshot of the VISA Back to Business Study, which looks at how consumers and small businesses—from tiny one-person ventures to job-creating employers—are adapting to the current business environment by embracing digital payments. 

“Consumers are really demanding it, and small businesses are saying I have to support that going forward,” says Kevin Phalen, VISA’s head of global business solutions. “Those that have taken this as an opportunity will survive and thrive.”

VISA surveyed 4,500 consumers and 2,000 small businesses in eight countries—the U.S., Canada, Brazil, Germany, Ireland, Hong Kong, Singapore and the U.A.E.—from June 18 to June 29.

What’s clear from the data is that consumers are changing their behavior to embrace digital payment methods to stay safe from COVID-19. Businesses that adapt how they accept payments accordingly will have an opportunity to build stronger relationships with their customers. This applies to even the tiniest, one-person ventures.

Here are some of the key findings on consumer behavior:

  • Nearly half of global consumers (46%) said using contactless payment methods is among the most important safety measures for stores to follow. 
  • Nearly half of global consumers (48%) say they won’t shop at a store that only offers payment methods that require contact with a cashier or a shared device.
  • 78% of consumers have changed the way they pay, including shopping online when possible (49%), using contactless payments (48%) and not using cash as much (46%). 
  • 70% of consumers have used a new shopping or payment method for the first time. Among them:
    • 26% have used tap to pay for in-store purchases, shop for groceries or buy household items online 
    • 34% have tried curbside restaurant pick-up  
    • 25% have tried buying online, then picking up a purchase in store.

“Generally, whether they are a microbusiness or a small business, the tools and capabilities are there to move into this digital environment, whether it is through advertising, building up their social media presence or how they pay and get paid,” says Phalen. “In many cases you have sole proprietors that have the same needs and desires as the 10-person small business and the 25-person small business.”

Some small businesses have responded to these changing preferences quickly—and many are optimistic about the future. 82% of small businesses in the U.S. and 77% in Canada expressed optimism, compared to 75% globally. Optimism was highest in the United Arab Emirates (94%), Brazil (84%), Ireland (74%), and Germany (72%). The least optimistic were in Hong Kong (64%) and Singapore (57%). 

As they move forward, some small businesses are already embracing more digital methods of doing business: 

  • 28% have tried targeted advertising on social media 
  • 27% have sold products or services online
  • 20% have adopted contactless payments
  • 33% said they have accepted less cash, or stopped accepting it since COVID-19.

“Many of them had to put their menus and everything else online,” says Phalen. “They had to develop a new way through social media and the like to inform their existing customers.  They have also needed to reach out and find other consumers. That migration into advertising on social media and building up their social media presence is critical.”

There’s a generational component to these choices: 41% of millennial owners say they have accepted less cash or stopped accepting it altogether, compared to 31% of Gen Xers and 21% of Boomers.

Ultimately, small businesses with an “omni-channel” approach that ties together all of their digital properties, such as their social media sites and website, will find themselves in the strongest position, Phalen says.

Digital overwhelm

For many business owners, overcoming fears of going digital will be essential to accomplishing this. In the survey, 74% expressed worries about making the transition, mentioning concerns about data privacy and security (32%), losing their personal connection with customers (31%) and the cost of going digital (28%). Given the widespread incidence of fraud, 52% said they are likely to buy a fraud management tool to protect their business and customer data from being stolen.

What if you’re among the anxious and don’t know how to get started accepting digital payments? Talk with you banker. Many banks will be able to help you get set up with a merchant account, which can be the most cost-effective option for small businesses that do a high volume of transactions to accept credit card payments.

“The financial institutions that support small businesses know they have to rapidly help them evolve in this digital economy,” says Phalen. 

Your bank isn’t the only option. Clover, Square and PayPal offer remote payment tools for those who don’t want to sign a merchant services agreement because they don’t do a high enough volume of digital transactions to justify it. And some of the largest accounting software providers, such as QuickBooks and FreshBooks, enable acceptance of credit cards and ACH payments from customers’ bank accounts by checking a box on an invoice. With customers you know and trust, Zelle—a bank-to-bank transfer that comes with no added fees—is another fast-growing option.

Ultimately, the more digital options payment options you offer, the better able you will be to keep customers happy in this new era of social distancing. Accepting digital payments can also improve cash flow, enabling customers to make a purchase even if they haven’t had time to make a withdrawal from a bank machine.

“If you can get through the pandemic, then when this hopefully comes to an end in the future, you’ve got a leg up,” says Phalen.

 


 

This article was written by Elaine Pofeldt from Forbes and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.

Stay Connected

Get the latest tech insights delivered straight to your inbox