Majority of Respondents Would Give Up Coffee for a Week if They Could Collect Payments from Customers Faster
DENVER, CO, – May 21st, 2008 – The results of a new survey by PaySimple and Market Platform Dynamics (MPD), released yesterday at the NACHA Payments 2008 Conference in Las Vegas, indicate that over the next two years small businesses believe more of their commerce will be done using electronic payments.Currently less than 50% of those surveyed accept some form of electronic payments, however, these business owners see the future of electronic payments coming quickly, as roughly 70% of them believe that within the next two years 50% of their payments will be via electronic methods.
“Small businesses are the back bone of the US economy and have generated almost 80% of new jobs in the last ten years,” explained Jeff Gardner, President of PaySimple. “At the end of the day, these businesses want to make it as easy as possible for their customers to transact with them, and consumers are demanding more efficient payment options. Electronic payments are slowly displacing the more traditional payment methods as these companies react to customer demands and find solutions that are reasonably cost-effective, flexible, and easy to deploy.”
Overall, roughly 78% of companies sampled prefer paper cash and checks today, and for 66%, paper checks are the primary method of payment. Roughly one quarter favor cash and 28% choose electronic payments, with the exception being retail and travel where electronic is overwhelming preferred. Most of those surveyed do business directly with consumers – with their customers transacting with them on a monthly basis – and 55% report a typical transaction size of more than $500.
When asked about what drives adoption, most companies surveyed concurred that cost is not a deciding factor, rather site the motivating factors to be convenience, cash flow and sales lift. According to Karen Webster, president of Market Platform Dynamics, “End customers have a strong influence, and therefore, the payment needs of small businesses are growing as consumers want more convenience in their payment options. As demand increases, owners are getting more sophisticated about their options for satisfying their customers’ needs for online payments solutions.”
The study was commissioned by PaySimple, the leading provider of SaaS (Software as a Service) on-demand electronic payment solutions for small businesses. Conducted in April 2008, the survey questioned more than 500 small businesses with annual revenues of up to $5 million, and covered a broad range of industries across many geographies. Over two third had been in business more than ten years. The goal was to better understand the state of electronic payment acceptance for US small businesses.
Additional survey findings:
Collecting online payments is a top strategic business priority for many small businesses
52% of those surveyed would give up coffee for a week if they could collect payments from customers faster and less expensively
Tech savvy businesses are more likely to accept electronic payments
61% of respondents have a Web presence; only 26 % accept payments on their website
Less than 13% use electronic means to generate and send customers invoices
Small businesses that accept electronic payments want a better solution and are willing to switch providers to get it
Roughly 70% of the survey sample believe that within the next two years 50% of their payments will be via electronic methods.