By the end of 2020, 82% of SMBs surveyed had embraced new forms of digital technology to meet changing consumer behaviors.
Businesses are embracing contactless payments — a trend fueled by the pandemic.
According to the third edition of the “Visa Back to Business Study – 2021 Outlook,” the continued small and micro business (“SMB”) shift towards digital commerce will evolve in the New Year and bring an increased focus on areas such as security and fraud prevention, and more emerging payment tools such as "buy now, pay later" and mobile payment acceptance.
According to the study, by the end of 2020, 82% of SMBs surveyed had embraced new forms of digital technology to meet changing consumer behaviors. Looking ahead to 2021, SMBs are assessing what other payment technologies are critical to meeting today’s consumer expectations, with results led by security and fraud management software (47%), contactless or mobile payment acceptance (44%), accepting payments via mobile device (41%), installments or "buy now, pay later" (36%) and digital backend payment operations (31%).
“With greater hindsight into 2020, we can clearly see that the digital payment experiences that excelled the most — contactless and e-commerce — were driven out of necessity and have become more habitual in people’s daily lives at a pace not often seen,” said Kevin Phalen, global head of business solutions, Visa. “If 2020 was the year of contactless and e-commerce, results of this study tell us that 2021 will bring greater attention to security and fraud prevention, and trial of more emerging digital commerce tools that help businesses thrive.”
All markets surveyed have seen a rapid adoption of new payment technologies and changing consumer behavior related to commerce. Additional findings from the study in Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore, United Arab Emirates (UAE) and United States highlight the depth of the impact in 2020 and expectations for 2021.
The global rise of contactless payments in 2020, spurred by challenges including consumers looking for safer ways to pay amidst the pandemic, is showing no signs of slowing down in the New Year. In fact, in June 2020 only 20% of SMBs surveyed had offered contactless payments for the first time — now, 39% report they have started to accept new digital forms of payments. Nearly three in four (74%) SMBs expect consumers to continue preferring contactless payments even after a vaccine is widely available.
SMBs have steadily increased their efforts to meet consumers where they are now: online. Globally, 82% of SMB owners have made updates to their operations to meet the increasing demand for digital payments, up from 67% in summer 2020 when the first Visa Back to Business Study was released.
Tech-savvy business owners (52%) are more likely than their novice counterparts (39%) to invest in security and fraud protection. Recognizing the significance of and responding to a potential fraud attack will continue to be a decided advantage in 2021 as the shift to digital sales continues to increase. Despite concern, global fraud rates remain at historic lows, at roughly $0.007 for every $1.001.
NEW ERA FOR CONSUMER HABITS
Almost overnight, consumers put COVID-19 safety measures at the top of their shopping lists, igniting a rapid shift to touchless commerce. Two-thirds (65%) of surveyed consumers would prefer to use contactless payments as much as, or even more than, they are currently, and only 16% say they would revert to their old methods of payments, post-pandemic.
While the universal focus is on mask use in stores, consumers are also eager to have payment alternatives to handling cash, pens and keypads. Forty-seven percent of consumers say they will not shop at a store that does not offer a contactless way to pay.
Card cleanliness remains key for consumers in the fight against the spread of COVID-19. More than three in five (62%) are taking steps to keep their credit cards clean; using disinfectant on their card is the top approach, at 31%.
The Visa Back to Business Study was conducted by Wakefield Research between Nov. 13 and Nov. 25, 2020 among 250 small business owners at companies with 100 employees or fewer in Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore, UAE and the United States. Separately, the consumer portion of the survey was conducted by Wakefield Research between Nov. 13 and Nov. 25, 2020, among 1,000 adults in the U.S., and 500 adults in Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore and UAE. The data was weighted to ensure an accurate representation of adults aged 18 and older in each market.