Small Businesses Use Business Credit Cards for Cash Flow, Not Rewards

Cash retains a stubborn presence in small- and mid-sized businesses, but business credit cards are beginning to erode that dominance by addressing the operational pressures that keep firms tied to currency and paper.

The findings come from “Ready for Change: Why Nearly Half of SMBs Want to Ditch Cash and Checks,” as published by PYMNTS Intelligence in tandem with Mastercard and based on a December survey of 412 U.S. SMB owners and executives.

How Cash and Checks Remain Embedded in Operations

Cash usage skews younger. Gen Z owners and operators make 52% of their business payments in cash. Rural SMBs and consumer-facing service providers also report elevated reliance, reflecting in-person transactions and tightly managed daily liquidity.

Checks persist for different reasons. Businesses operating for at least 20 years make 54% of their payments by check. Reliance is pronounced among baby boomer owners, professional services firms and construction or utilities companies. In these segments, check-based invoicing, approvals and recordkeeping form part of established business-to-business workflows.

At the same time, 45% of SMBs say they are highly interested in reducing their reliance on cash.

Where Business Cards Demonstrate Clear Advantage

When businesses evaluate payment methods by use case, credit cards lead in specific areas. Sixty-three percent of SMBs cite disputing a payment and obtaining a refund as the most suitable use case for a business credit card. Fifty-nine percent cite the ability to make a payment without having cash on hand. Slightly more than half, 51.3%, point to paying suppliers quickly.

These responses position cards primarily as tools of protection and liquidity. Chargeback rights, defined credit lines and broad acceptance provide structural advantages that neither cash nor checks can offer.

Retail trade stands out as particularly card-forward, treating cards as a core operating instrument rather than an occasional fallback. Construction and utilities firms also cite operational use cases at elevated rates, suggesting that cards serve not only for payments but also for cost predictability and financial oversight.

What Businesses Want From Their Cards

The features businesses are willing to pay for center on cash-flow control. Forty-six percent would pay for the ability to adjust payment windows based on when funds are available. Forty-three percent would pay for installment capabilities, and 42.9% for longer payment windows.

Flexibility over timing outweighs rewards programs. The data indicate that SMBs prioritize tools that allow them to manage outflows in alignment with receivables and revenue cycles.

Security remains critical. Fraud and cyber protections rank consistently across segments. In addition, “business experiences” register strongly in retail and hospitality, suggesting that SMBs interpret these offerings as access to networks, supplier relationships and growth opportunities rather than discretionary perks.

Barriers remain material. Cost and fees associated with cards or digital technology are cited by 25.3% of SMBs as obstacles to reducing cash reliance. Vendor surcharges, reconciliation complexity and difficulty accessing business credit cards also weigh on adoption decisions.

Implications for Issuers and Banking Partners

Cards must replicate what cash does well, including immediacy and simplicity, while adding liquidity flexibility, dispute protection and visibility into spending.

Pricing structures must address fee sensitivity, particularly in segments where margins are narrow. Integration with bookkeeping systems is essential to reduce reconciliation friction.

The survey shows that 23% of SMBs prefer a self-serve digital application, yet significant shares still favor live chat or phone representatives. Adoption efforts that ignore this blended expectation risk stalling at the point of conversion.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.