Pandemic Boosts Digital B2B Payments Adoption
Saturday, September 5, 2020
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 payments since the start of the pandemic.
According to a new small business study by Mastercard, more than 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.
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 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: More than 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 here to stay: 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.
Now, as businesses seek to improve cash flow by digitizing payments traditionally dominated by manual processes, Mastercard survey data shows a majority (77%) of small business have adopted a digital service such as payment collection (50%) and electronic
invoicing (26%) to modernize business payments. Expressing a desire to consolidate digital service providers, one in two small business owners say they would ideally manage payment-related services through their bank.