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SMBs are increasingly investing in digital responses to consumer concerns related to the pandemic, according to a Back to Business study.
Due to consumer demand, thousands of small businesses are turning to contactless payment solutions and other digital tools in response to the coronavirus pandemic, according to a new survey commissioned by Visa.
The survey is made up of responses from about 2,000 small and midsize businesses and 4,500 consumers in Brazil, Canada, Germany, Hong Kong, Ireland, Singapore, UAE, and the United States.
The Visa Back to Business study found that more than 60% of consumers would switch to a business that installed contactless payment options and nearly half said they would stop shopping at a store that only offered payment methods that relied on contact with a cashier or shared machine.
SEE: Return to work: What the new normal will look like post-pandemic (free PDF) (TechRepublic)
More than any other group, millennial small business owners are more likely to have already lessened their reliance on cash compared to businesses owned by Gen X or boomer respondents.
Almost one third of all businesses surveyed said they were pivoting to social media advertising and online stores to make up for the dramatic dip in store-based foot traffic.
“78% of global consumers have adjusted the way they pay for items in the wake of intensified safety concerns over coronavirus. This shift to digital-first commerce and technologies like contactless payment has ushered in a new generation of consumer tendencies that will have a rippled effect on the global economy for years to come,” the study said.
“The new Back to Business study shows the recent dramatic shift to digital commerce for consumers and highlights how fraud tools are playing an important role in offering businesses protection during this new normal.”
SEE: Report: SMB’s unprepared to tackle data privacy (TechRepublic Premium)
As one would imagine, small and midsize businesses that were started more recently were more likely to pivot to digital-first changes due to the use of technology in their personal lives.
The study also looks into companies that do not have a large digital presence to figure out what is keeping them from the web. Most respondents cited concerns about data privacy and security “followed closely by less personal connection with customers (31%) and cost to invest in digital infrastructure (28%). Nearly 75% of all SMBs expressed some kind of concern to moving their business online,” the survey added.
About half of all respondents said they would buy security software to protect user and business data, with more than 60% of millennials saying they would.
Andrew Naumann, vice president of Cybersource, said younger generations understand the importance of protecting businesses as transactions shift to online.
“They realize moving online is more than just the click of a button–fraudsters are early adopters to new technologies and are continuing to exploit this window of opportunity during this shift, and SMBs need a comprehensive fraud strategy,” he said.
“But with most fraud tools in the current environment, this can often be at the expense of legitimate orders. Due to COVID-19 we are seeing a tidal wave of businesses going online or elevating their digital presence now that nearly half of consumers prefer online shopping. While the shift to digital has increasingly been an upward trend, the last few months have really accelerated the necessity factor.”
Emerging technologies are also getting a spotlight thanks to the pandemic. According to the survey, 70% of respondents said they have used a new shopping or payment method for the first time since the start of the COVID-19 situation. That figure included 26% of people who have used tap-to-pay technology for in-store purchases.
Another 34% of people said that for the first time they had shopped for groceries or household items online while 28% said they ordered food with curbside restaurant pick-up for the first time. A quarter of respondents said they began to buy things online or on their smartphone rather than pick up things in person from the store for the first time in their lives.
“Customers are online and businesses that are unable to meet customer demand run the risk of getting left behind,” Naumann said.
Since the pandemic began, almost 90% of respondents said they have used some type of payment method more often than they did at the start of the year, whether it be swipe or insert chip, contactless card using tap, or mobile payment.