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U.S. SMBs say payment innovation is key driver of growth

Thursday, June 05, 2025 — 16:17:54 (UTC)

June 5th, 2025. London, U.K. – According to new research, ‘Balancing the Books’, from leading payments platform Paysafe (NYSE: PSFE), an overwhelming 96% of U.S. small and medium-sized businesses (SMBs) accepting in-person transactions plan to upgrade their payments technology in the next 12 months. Despite some economic challenges, SMBs remain optimistic and view payment innovation, including e-commerce, as critical to their future growth as well as overcoming cash flow and fraud issues.

Based on a survey of 1,000 SMBs across industries — from retail, food/beverage to healthcare, construction, auto, beauty/wellness, and professional services — the report reveals that 92% of businesses feel positive about their future. Over half (51%) expect revenue to grow by more than 20% over the next year.

SMBs see payments as a critical driver of growth, with 82% considering a good payment experience a non-negotiable feature. Some merchants place an even greater emphasis on the payment experience, especially those in the beauty/wellness (90%), retail (89%), and food/beverage (86%) industries.

Optimizing the payment experience is closely tied to checkout innovation plans. Over the next year, 52% of SMBs expect to upgrade their point of sale (POS) system to support mobile and contactless payments, with 47% diversifying to include mobile POS terminals.

The same proportion of merchants (47%) plan to integrate their payment systems with another business software. SMBs are laser focused on unifying their systems, with 82% having integrated their payment tech with accounting software, 72% with a customer relationship management (CRM) tool, and 66% with an inventory management system.

Payment security is also top of mind for SMBs, with 77% expressing concerns. There’s no surprise that 47% want to bolster payment security over the next 12 months.

SMBs continue to embrace e-commerce. Today, only 30% of SMBs don’t sell online, but two-thirds of these holdouts plan to diversify into e-commerce within the next 12 months. Of the 70% of SMBs offering online purchasing, all but 10% have plans to expand this.

Beyond specific plans for next year, SMBs hope to benefit from cutting-edge payments tech. Close to half (46%) see value in instant or real-time payments, while 41% express an interest in ‘tap on phone’ for POS, which converts salespeople’s smartphones or tablets into contactless terminals. Even artificial intelligence (AI) is catching SMBs’ attention. Three-quarters (75%) believe AI has an important role to play in processing their business’s payments, with even more (79%) emphasizing its value in combating fraud.

Due to their vulnerability to cash flow issues and slow payment settlement times, SMBs are intensely focused on payment innovation. A third of SMBs (32%) cite payment settlement delays as a major cash flow disruptor, rising highest (37%) among larger merchants (101-250 employees). As a result of cash flow challenges, 42% of all SMBs have had to delay paying vendors or their own employees.

Overall, payment service providers (PSPs) appear to be effectively supporting SMBs, with 90% satisfied with their provider. But there’s no room for complacency from PSPs, with 60% of merchants encountering a payment processing issue at least once a month. Aside from failed payments, SMBs identify chargebacks and disputed payments (an issue for 30%) and, above all, high interchange fees (48%) as their biggest processing challenges.

“Small and medium-sized businesses have long played an essential role in the American economy, and it’s great to see in our new research report, ‘Balancing the Books’, that SMBs’ positive outlook is underpinned by their strong belief in the value of payment tech and e-commerce,” commented Rob Gatto, Chief Revenue Officer at Paysafe. “Whether it’s upgrading their point-of-sale terminals to support mobile and contactless payments, expanding into online sales, or improving transactional security, payment innovation is enabling SMBs to strengthen the customer experience and ultimately increase revenue to better manage cash flow issues.”

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Source: Company press release.

Categories: Reports and research