SMBs Slowly Making the Shift into Digital Age, Says Survey

Recent facts and statistics on small and mid-sized businesses (SMBs) adaption to the digital age might surprise you. According to data from Payments Source, small and mid-sized businesses are adapting to digital payments slowly – much slower and for different reasons than big businesses. Unlike large enterprises, SMBs still rely heavily on cash and checks. (More than half of all SMB payments are either cash or check.)

As per the breakdown of all SMB payments: paper checks account for 44{77adcb1e69a3dc7e41c9865333e1aeb50abe74a98481e530a54b1dc2c938c16c} of payments, ACH electronic transfers at 30{77adcb1e69a3dc7e41c9865333e1aeb50abe74a98481e530a54b1dc2c938c16c}, cards at 17{77adcb1e69a3dc7e41c9865333e1aeb50abe74a98481e530a54b1dc2c938c16c}, wires at 6{77adcb1e69a3dc7e41c9865333e1aeb50abe74a98481e530a54b1dc2c938c16c} and cash coming in at 3{77adcb1e69a3dc7e41c9865333e1aeb50abe74a98481e530a54b1dc2c938c16c}. Aite Group defines SMBs as businesses that generate between $100,000 and $20 million in account revenue. The biggest motivator for SMBs to make changes for small and midsize businesses is cost, versus improving efficiency. Advances in digital payments technology and mobile apps are making it easier for SMBs to make the jump.

Here are some insights from Aite’s survey on SMBs increased willingness to adopt digital payments:

  • 40{77adcb1e69a3dc7e41c9865333e1aeb50abe74a98481e530a54b1dc2c938c16c} of SMBs would use mobile payments more often if all bills and supporting documents could be easily viewed on a smartphone or tablet.
  • They would also like to be able to scan bills via a mobile app.
  • A third of SMBs would use mobile payments if it was possible to receive a text or notification on a dashboard when a bill needs approval for payment.

The Truth about SMBs and EMV Chip Card

SMBs are also shifting to EMV technology slower than big businesses. The deadline for the shift from mag-stripe to EMV chip card technology went into effect in October 2015. But not all small businesses have adopted EMV technology, as of October 2017. The reasons for this are diverse:

  • 35{77adcb1e69a3dc7e41c9865333e1aeb50abe74a98481e530a54b1dc2c938c16c} of SMBs say they don’t accept payment cards.
  • 35{77adcb1e69a3dc7e41c9865333e1aeb50abe74a98481e530a54b1dc2c938c16c} say they are unfamiliar with EMV technology and do not believe it will impact their business.
  • 13{77adcb1e69a3dc7e41c9865333e1aeb50abe74a98481e530a54b1dc2c938c16c} say they do not process enough card payments to make the transition worthwhile.
  • 11{77adcb1e69a3dc7e41c9865333e1aeb50abe74a98481e530a54b1dc2c938c16c} say the transition to the technology is simply too much of a hassle for their business.
  • 4{77adcb1e69a3dc7e41c9865333e1aeb50abe74a98481e530a54b1dc2c938c16c} disagree with the liability shift, and 3{77adcb1e69a3dc7e41c9865333e1aeb50abe74a98481e530a54b1dc2c938c16c} feel that the upgrade to the EMV card reader is too expensive.

As more and more small businesses consider the shift to EMV and consider the advantages of using digital payments, payment processors are stepping forward to offer solutions. Because SMBs often struggle to secure merchant services from traditional sources, alternative providers have quickly become their go-to option. Solutions like merchant account are improving SMBs payment processing and efficiency and providing chargeback protection and prevention programs.


Author Bio: Electronic payments expert Blair Thomas co-founded eMerchantBroker, serving both traditional and high-risk merchants. His passions include producing music, and traveling.