By Pete Rizzo (@pete_rizzo_)
The National Small Business Association (NSBA) released new findings on September 16 indicating that small business owners are increasingly looking to alternatives to credit and debit for accepting payments online.
From 2010 to 2013, the NSBA revealed that the number of small businesses (SMBs) accepting credit or debit for payments online dropped by 22 percent, falling from 91 percent to 69 percent over the three-year period.
The findings were released as part of the organization’s 2013 Small Business Technology Survey conducted online this August. The result is a comprehensive look at how today’s online business owners are not only accepting payments, but making payments for essential services.
In this PYMNTS.com Data Point, we break down the findings to illustrate which payment companies are making progress in online payments and identify areas where new solutions could find traction in the market.
PayPal Nets Biggest Benefit From Alternative Payment Migration
For the payments industry, the biggest takeaway from the study was that small business owners are increasingly looking for alternative ways to accept payments online, and that certain providers are already colonizing this space.
As this chart illustrates, PayPal, eBay and Amazon benefited substantially from this migration, though PayPal saw the biggest increase at 25 percent.
While it may seem like these payments players will continue to gain traction in the coming years, the NSBA indicated new entrants to the market could find success. The study found that 20 percent of merchants are using other services for accepting payments online, though most were checks, money orders and banking transfers.
80% Of Small Business Owners Shop Online
For B2B businesses, the NSBA found that small business owners are becoming increasingly comfortable managing the financial aspects of their business online.
Over the last three years, the NSBA has seen significant spikes in the number of small business owners who manage their banking accounts online or utilize electronic bill pay.
85% Of SMBs Sell Through Their Own Website
The NSBA revealed that 85 percent of SMBs sell through their website. However, it also asked SMBs to name the third-party services that help them bolster their eCommerce presence.
The most popular channel merchants used to sell products and services online was eBay, though a number of other channels captured a notable share of the vote.
When SMBs were asked why they did not sell online, the majority – 68 percent – indicated they don’t have products or services that they could sell online. This finding denotes there may be additional room in the eCommerce space for a solution that can capture these underserved SMBs.
For more information on how small business owners are using cloud computing, accessing the Internet and keeping their shops safe online, download the full report here.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More