The Value of Electronic Payments for Small Businesses

The COVID-19 pandemic showed us the resiliency of America’s small businesses and entrepreneurs. Small business owners have adapted to ever-changing consumer demands, embraced contactless protocols, and in many cases, adopted novel business models. All the while, the electronic payments system has provided Main Street businesses with the tools, resources, and innovations that are vital to their success.

Pro-investment policies have encouraged electronic payments providers to invest in the type of technology that has enabled this “pivoting” and continuous adoption across the small business economy. Contactless transactions, secure remote commerce, biometric authorization, EMV chips and more have provided small businesses and consumers with innovative, safe and secure ways to make purchases. These tools and ongoing innovation add value for consumers and help small businesses tailor their services and more effectively compete across industries, including within the retail sector against the larger players.

New data from SBEC’s latest business survey highlights the value that entrepreneurs place on the importance of electronic payments. Among new business owners who started a business during the pandemic, 87% said that access to electronic payment options was important. Additionally, access to electronic payments tied for first (68%) as the most important tool or technology in starting a new business.

These survey results illustrate how electronic payments continue to fuel revenue growth for small businesses across the country, and new business creation. The electronic payment system helps businesses owners drive more sales and to attract more customers across a larger number of channels, like online and mobile, in addition to their physical stores. Digital payments reduce risk, guarantee payments, and improve the overall customer experience.

Make no mistake, business profits are a good thing, which firms large and small reinvest into innovation and new technologies. In turn, this positive investment activity helps small businesses compete and to better serve their customers. That is why state policymakers and Congress must support and enable ongoing investment into the electronic payments system – to promote the innovation of new technology that will help to boost small business sales, and drive the growth of entrepreneurship and opportunity post-pandemic.

SBE Council continues to oppose harmful government regulations, like the Durbin Amendment, that are undermining the very system of innovation that has afforded the small business community a lifeline during the pandemic. Federal lawmakers should take steps to encourage continued investment in the electronic payments industry, as doing so will better position Main Street businesses to thrive in a post-pandemic economy and the global marketplace.

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