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Data for today’s episode is provided by Mercator Advisory Group’s Blog – 2020 Small Business PaymentsInsights: SMB Attitudes and Banking – Charting a New Course
Pandemic Spurs the Use of Online Banking Services for Small Businesses:
- The use of many online services has increased year over year, likely due to the pandemic.
- Online payroll and direct deposit jumped from 55% used in 2019 to 65% in 2020.
- Online payment processing services jumped from 55% used in 2019 to 64% in 2020.
- Mobile check deposit jumped from 59% used by small businesses in 2019 to 69% in 2020.
- Mobile ATM withdrawal increased 13% between 2019 to 2020, with 63% of small businesses currently using it.
- “Mobile ability to lock accounts” increased from 47% of small businesses using in 2019 to 59% in 2020.
Mercator Advisory Group’s most recent Primary Data report, 2020 Small Business PaymentsInsights: SMB Attitudes and Banking- Charting a New Course, based on the company’s annual Small Business PaymentsInsights survey conducted in Spring 2020, reveals that small businesses continue to trust their banks, but are more and more looking for advice, wisdom—and credit—from outside sources. Satisfaction with their primary bank’s commitment to small businesses remains very high at 84%. Furthermore, they are looking to a broader range of individuals for advice in running their business beyond their primary financial institution. Also, four in 10 (39%) are looking for a larger credit line than they currently have which is up from the 32% reported last year.
Usage of small business charge cards and small business debit is increasing year over year. Business debit card use has increased from 34% in 2019 to 42% in 2020, and charge card use grew from 23% to 31%. Small businesses may be moving some of their credit card transactions to other payment types in order to avoid revolving credit.
While 2020 has been a hard year for all, small business as a category was particularly hard hit. That said, not all small businesses were negatively affected by the pandemic; some even thrived. When this survey was conducted in April of this year (the relative early days of the pandemic in retrospect), one-quarter (24%) of SMBs surveyed reported that the pandemic had positively affected their business, and another 17% reported they were unaffected. The remaining 59% were negatively impacted.
SMB Attitudes and Banking- Charting a New Course is the third of three reports summarizing the results of the 2020 Small Business PaymentsInsights survey, the fourth annual survey of small businesses fielded by Mercator Advisory Group. This was a web-based survey of 2,000 U.S. small businesses (between $100,000 and $10 million annual sales) regarding their use of payments and banking services.
“The pandemic has brought a new perspective to many businesses, they are looking for more advice from a wider variety of individuals as they navigate the tough times. I think it is important to note that despite the upheavals that 2020 brought, a majority of the small businesses we surveyed still have plans to grow their business in the future,” notes the author of this report, Peter Reville, Director, Primary Data Services at Mercator Advisory Group.