Small businesses that don’t accept digital payments are missing out on customers, a new study confirmed.
Nearly three-in-four consumers (73%) say that when comparing two businesses, the type of payment options available will influence their final decision, according to data discovered by Thryv Holdings, Inc. (NASDAQ: THRY) and Payments Dive.
The companies surveyed 2,050 small business consumers to determine how payment strategies have changed, what customers seek from vendors, and how they’ll respond if a business doesn’t offer their preferred payment method.
“We’ve seen consumers grow accustomed to the ease, convenience, and safety of digital payments, and the pandemic accelerated this trend,” said Ryan Cantor, Chief Product Officer at Thryv. “Consumers want more digital and contactless payment options, and the small businesses choosing to adapt and capitalize on consumer preferences will win the war of customer retention.”
Younger consumers are driving the trend. According to the survey results, 68% of Millennials and 71% of Gen Z respondents prefer cashless payment options. These younger generations are spending at greater rates than older customers, and their purchasing power has grown significantly as they have aged and advanced in their careers.
Over the past two years, contactless payments have become ubiquitous and consumers have grown accustomed to using digital wallets, touchless terminals and tap-to-pay platforms. Some 59% of consumers say they used such tools more often during the pandemic, and 71% say they intend to continue using cashless or contactless payments in the future.
“More than 50% of my business this year has been cashless,” says Andy Corman, owner of AC Trash Hauling, a junk removal company in the Indianapolis, Indiana, area. “I can send a bill online and I can get paid before I leave the driveway.”
Other key findings from the report include:
- Digital payment options preferred for purchases over $1,000: 64% say they prefer digital payments when paying for larger services, like home repair or medical treatment
- Paperless is the future: 67% of those surveyed said they prefer to receive receipts in a format other than paper, such as email or text
- Safety isn’t a concern: 77% of customers believe using a credit card on an online portal is just as safe or safer than paying in person
- No fees, please: 57% of customers are not willing to pay additional convenience fees to pay with a credit card but when given other digital options, like ACH, they will use them
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