Visa Study: Small Businesses Optimistic, Looking to Digital Payments for Growth 2022

Mihai-Alexandru Cristea 14/01/2022 | 14:16

As Visa continues toward its goal of digitally-enabling 50 million small and micro businesses (SMBs), a new research study released today– the “Visa Global Back to Business Study – 2022 SMB Outlook”– found that 90% of surveyed SMBs said they are optimistic about the future of their businesses, the highest level of optimism in Visa Global Back to Business studies to-date. While wiping down groceries and quarantining mail might be bygones of an earlier pandemic era, some changes—such as increased use of digital payments—are here to stay: 82% of SMBs surveyed said they will accept digital options in 2022 and nearly half (46%) of consumers surveyed expect to use digital payments more often in 2022, with just 4% saying they will use them less.

 

“Payments are no longer about simply completing a sale. It’s about creating a simple and secure experience that reflects one’s brand across channels and provides utility to both the business and its customer,” said Jeni Mundy, Global Head Merchant Sales & Acquiring, Visa. “The digital capabilities that small businesses built up during the pandemic – from contactless to eCommerce – helped them pivot and survive and by continuing to build on this foundation, can now help them find new growth and thrive.”

According to this year’s study, which surveyed small business owners and consumers in nine markets – Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore, United Arab Emirates and United States – the consensus outlook for 2022 is one of optimism and intent to digitize even more:

 

The Path Forward in 2022 for SMBs

  • 2022 Ushers in Optimism and Confidence: Building on the 90% of SMBs surveyed who are optimistic about their future, 54% viewed the last year as an opportunity and report their business is doing well heading into the new year, up from 46% who said the same during summer 2021[1].
  • Going Long on Digital Payments – Even Crypto: An overwhelming 82% of SMBs surveyed said they plan to accept some form of digital option in 2022 and 73% see accepting new forms of payments as fundamental to their business growth. Of those surveyed, 24% said they plan to accept digital currencies such as the cryptocurrency Bitcoin.
  • E-commerce Buoyed Businesses: Of small businesses surveyed with an online presence, 90% agreed their survival through the pandemic was due to increased efforts to sell via e-commerce, and reported that, on average, over half of their revenue (52%) came from online channels in the last three months.
  • Leaving the Change: A majority of SMB respondents expect their business to shift to relying exclusively on digital payments in the future. While 64% of survey respondents anticipate being able to make this shift within 10 years, 41% say it could be within the next two years—and 18% are cashless already.

 

 

Consumers Set the Tone in 2022

  • Accelerating Toward a Digital Future: More than half of consumers surveyed (52%) responded they expect to shift to being cashless within the next 10 years, 25% said it will happen in the next two years and 16% are already using only digital payments. The top benefits for relying more on digital payments amongst surveyed consumers were easier online shopping (47%), followed by less risk of robbery (38%) and convenience (37%).
  • Abandoned Shopping Carts In-Real-Life (IRL): The failure to offer digital payment is frequently a dealbreaker – 41% of consumers surveyed said they have abandoned a purchase in a physical store because digital payments were not accepted, and younger shoppers are even more likely to do so. Gen Z (59%) and Millennials (55%) have not bought something because there was no way to pay digitally, significantly more than Gen X (38%) or Boomers (19%).
  • Consumers Embrace the Global Marketplace: As small businesses look to reach more customers online, 50% plan to increase cross-border sales in 2022. On average, 68% of consumers responded they are comfortable buying items or services from a business in another country, with 57% citing the fraud protection typically offered by their credit or debit card provider makes them more comfortable with international commerce.

 

 

Digitally-Enabling 50 Million Small Businesses

Since the start of the pandemic, Visa has launched a variety of community-based programs to help more small businesses accept digital payments and gain greater access to the digital economy. As part of this ongoing commitment, Visa today also announced it has helped to digitally-enable 24.8 million SMBs worldwide, or 50% of the multi-year goal it set in 2020 to digitize 50 million SMBs.

In Romania, Visa launched the #MarileAfaceriMici (BigSmallBusinesses) platform last year, with information about digitization solutions and special offers, aiming to help SMEs adapt to the new economic reality generated by the pandemic impact. In collaboration with Romanian banks and partners, Visa has developed innovative services for SMBs, which transform the way payments are made and contribute to business optimization. These include:

  • Phone or tablet turned into mobile POS: Visa Tap to Phone mobile app turns Android phones and tablets into payment terminals with no need for additional hardware. Romania is among the first 15 countries in the world where Tap to Phone was launched. Currently the Tap to Phone technology is offered in Romania by Alpha Bank, BCR together with Global Payments, CEC Bank, OTP Bank, Visa Wallet and iCard, and the interest of merchants and small businesses for this solution is constantly growing due to low costs and convenience.
  • Payment by card directly on the online invoice: SMBs that issue invoices can now collect their money from customers via card, accessing the payment button added on the digital invoice. This initiative, launched by the online billing platform SmartBill together with Visa, helps simplify the payment process, efficiently manage the cash flow of SMBs and increase the collection ratio of invoices.
  • Real-time money transfer: Visa Direct real-time payment solution allows for many use cases in various sectors . An excellent use case is in e-commerce, where customers can get their money back almost instantly when they return products or services purchased online by card, which makes a strong competition advantage for the merchants who have implemented the solution.
  • Qualified digital certificates for electronic signature: Through the partnership with Trans Sped, Visa Business and Visa Premium cardholders could benefit from qualified digital certificates at extremely advantageous costs. According to the Romanian and European legislation, the electronic signature based on a qualified digital certificate has the same value as the holographic one, it can replace it and it is legally opposable.

 

 

More information on the programs Visa has made available to small and micro businesses can also be found on the Visa Small Business Hub and the Visa Small Business COVID-19 support site.

[1] Visa Back to Busines Global Study, 5th Edition, page 6

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Download PDF or read online: December 2021 Issue | Business Review Magazine

The December 2021 issue of Business Review Magazine is now available in digital format, featuring the main story titled “Retail 2.0: E-Commerce Goes Hand In Hand With Offline Shopping”. Read it
Mihai-Alexandru Cristea | 22/12/2021 | 14:16
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