Small businesses moving to digital B2B payments for speed, security and transparency(Mastercard)
As COVID-19 continues to stress small businesses financially and operationally, small business owners across North America are turning to digital services to improve cash flow and modernize their payments ecosystems. Citing speed, security and transparency, more than half (57%) of small businesses say they’ve increased their use of digital services for business-to-business (B2B) payments since the start of the pandemic.
Mastercard study shows small business owners across North America are turning to digital B2B payments for speed, security and transparency.
According to a new small business study by Mastercard, over one third (38%) of small business owners in the U.S. and Canada say they’re experiencing cash flow issues associated with late payments and slow processing times for cash and checks. While the challenges of traditional, physical payments existed before the pandemic, these pain points were magnified by widespread lockdowns and social distancing measures. Now, nearly half (48%) of small business owners say their business is one missed payment away from going under.
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To address these challenges, nearly two-thirds (64%) of small businesses say they are actively trying to steer clients away from using cash and checks. Findings from the new Mastercard study show:
- Shift to digital business payments: With the majority of small businesses citing speed and security (91%) and transparency (87%) as top priorities, 82% say they’ve changed how their business sends and receives payments with 51% transitioning their clients to digital methods. Online card payments saw the greatest increase at 60%, while the use of cash (34%) and checks (24%) decreased more than any other payment types during the pandemic.
- Digital payoff: Over two-thirds (67%) of small business owners agree that one upside to the pandemic is that it prompted them to upgrade their digital/e-pay solutions, which 81% say has improved customer satisfaction levels.
- Digital is the new normal: Positive sentiment, increased customer satisfaction and continued exploration suggest small businesses plan to stick with digital business payments, even as the pandemic subsides. 70% say they are willing to invest in the technology required to advance their payment systems and 73% say digital payments are the new normal for their business going forward.
“The pandemic has made it painfully clear how labor intensive current business payment processes are, especially for small and medium-sized businesses,” said Ron Shultz, executive vice president, New Payments Business, North America at Mastercard. “With cash flow more critical than ever, we’re seeing an accelerated shift to digital B2B payments as businesses of all sizes look to safeguard their operations today and prepare for the future.”
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