Paysafe study finds retail optimism among US SMBs

Days away from the National Retail Federation's annual convention in New York City, more than half of U.S. small and midsize brick-and-mortar retailers are optimistic about the 2023 retail landscape, according to recent research conducted by Paysafe.

The U.S. In-store business payments outlook, published Jan. 11, 2023, found 70 percent of small and midsize retailers are prioritizing paytech integrations and taking a generally bullish outlook on the near-term future, despite current economic and geopolitical conditions, stated Afshin Yazdian, president of merchant solutions at Paysafe.

"We were happy to see that most merchants are optimistic about the year ahead and that they appreciate the contribution that payments can make to the overall customer experience and ultimately as a key differentiator for their businesses' growth," he said, adding the report is the latest in the company's Lost in Transaction research series and includes research data from an October 2022 survey of 200 small and midsize brick-and-mortar merchants in the United States.

2023 in-store retail outlook

Yazdian further noted that numerous brick-and-mortar merchants expanded into digital channels during the pandemic, which helped them grow and scale. In fact, he noted, Paysafe researchers found 73 percent of brick-and-mortar respondents have an online presence, and 62 percent agree that connecting with customers online, whether through social media, e-promotions, or virtual checkouts, is critical to their continuing growth.

Researchers cited the following additional trends in the report:

• Optimizing customer experience: Nearly two-thirds of respondents surveyed are thinking about optimizing their customers' journeys by complementing the in-store experience with digital capabilities. And 70 percent are planning to incorporate new payments technology in-store.

• Updating checkouts: Fixed terminal card readers are used by 65 percent of respondents, but businesses are exploring more modern systems. For example, 49 percent want to provide customers with smartphone-driven solutions, such as QR codes, that support scan and pay for items on-site, within the next two years.

• Prioritizing cash acceptance, usage: 91 percent of in-store businesses surveyed offer cash as a payment method. Almost all of the companies that currently offer cash plan to do so in the future: 85 percent indicated it will still be an option at checkout in the next one to two years.

• Adapting business models to the market: A majority of survey respondents indicated they are pulling out all the stops to keep their businesses relevant and competitive. Their attitudes reflect a good level of resiliency, optimism and flexibility in adjusting their businesses to dynamic and evolving markets, researchers stated, adding that 39 percent are increasing services or value.


• Making checkout a key differentiator:Most SMB respondents agreed that checkout plays a big part in their success. Eight-six percent stated that payments and the overall checkout experience are important for retaining existing customers, and 82 percent agreed that checkout helps attract new customers.

"In-store businesses are focused on providing the best experience they can for customers, and the checkout is central to this," researchers wrote, adding that "70% of SMBs say it's a priority for them to integrate new payments technology in-store to enhance customers' experiences. And 69% agree that they'd like to reduce the time their customers spend at checkout."

A downloadable copy of the report is available at: paysafe.com/en/paysafe-insights/lost-in-transaction-the-us-in-store-business-payments-outlook-for-2023/

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