Small businesses are navigating an increasingly complex payments landscape as consumers expect more ways to pay than ever before. While traditional methods like cash, checks, and card payments remain widely used, alternative payment options—from international wallets to cryptocurrencies—are steadily gaining traction. Understanding which payment methods small businesses accept offers valuable insight into how merchants are adapting to changing customer preferences and the evolving commerce ecosystem.
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Data for today’s episode is provided by Mercator Advisory Group’s report – Small Business Payments Acceptance: More Payment Options Creeping In.
What percent of small businesses accept cash?
- 70% of small businesses accept cash
- 93% of small businesses accept Visa
- Only 63% of small businesses accept checks
- Alipay & UnionPay are accepted by 40% of small businesses
- 28% of small businesses accept cryptocurrency
- For the most part there is little difference between male and female small business owners regarding payment methods accepted
About the report
Mercator Advisory Group’s most recent Insight Summary Report, Small Business Payments Acceptance: More Payment Options Creeping In, based on the company’s annual Small Business Payments and Banking Survey conducted in spring 2019, reveals that more small businesses are selling online (59%) than are selling in a physical store (47%). However, the bulk of share of sales is coming from in-store sales rather than online sales. Further, about one-third of small businesses (35%) report that they are selling via a mobile app. Small businesses are more likely to report that their preferred method of payment is from the card networks rather than cash or any other method. The primary reason for preferring a certain kind of payment is the ease of handling (65%); only 4 in 10 mention lower cost.
Small businesses are mainly getting merchant services from their primary bank (70%). A similar proportion are getting merchant services from a single provider. Many third-party providers offer smaller merchants ancillary services they need aside from core processing services, and many businesses are migrating to third-party providers for online and mobile services, often designed for their business verticals.
Payments Acceptance: More Payment Options Creeping In is the second of three reports summarizing the results of the 2019 Small Business Payments and Banking Survey, the fourth annual survey of small businesses fielded by Mercator Advisory Group. This was a web-based survey of 2,002 U.S. small businesses (between $100,000 and $10 million annual sales) regarding their use of payments and banking services.
The survey contained questions on current business sentiment, payment acceptance services, business-to-business (B2B) payments, and banking depository and loan services. Forthcoming companion reports summarize the survey’s findings on business-to-business payments and business banking services.
“There is a lot going on in the small business space when it comes to accepting payments, and the options available to merchants can be daunting. There is a great opportunity for companies that can understand the needs of small businesses and help them navigate the uncertainties of the ever-changing payments space,” notes the author of this report, Peter Reville, Director, Primary Data Services at Mercator Advisory Group.
Companies mentioned are: Alibaba, American Express, Apple, Chase, China UnionPay, Clover, Diebold, Discover, First Data , Google, Ingenico, LevelUp, Mastercard, Micros, NCR, PayPal, PayPal, Revel, Samsung, Shopify, Shopkeep, Square, Stripe, Verifone, Visa, and WeChat
