A Look into the Small-Business Payment Acceptance

Payment needs are changing, so are small businesses in their attempts to offer reliable solutions and get a chance to expand their bottom line. But a new report suggests that reasonable fees and relevant solutions have been and should remain a concern when shifting to digital payments.

Mercator Advisory group led a study known as the Square & Clover Delivering Merchants Beyond Payment Acceptance to analyze how some payment providers are modifying their solutions to fit small businesses and how different microbusiness are using the available remedies to break even in a competitive marketplace.

The 16-page report also sought to examine the performance of successful merchant acquirers who have managed to dominate the small business marketplace. Today microbusinesses are getting choosey when it comes to merchant acquirers because of three main reasons;

  • Price sensitivity,
  • Increasing security risks,
  • and the expensive cost of taking payments

In response to these growing pains, companies like Clover and Square have been taking a different approach in offering services to microbusinesses by using flexible solutions that allow businesses the freedom of choice while relying on hardware remedies.

Another focus area of the study was to find out how many microbusinesses are responding to their payment needs by using more than one payment provider. And the findings were that only 20 percent of small companies use two or more payment solutions.

This figure is fair judging from the fact that the move to consider more than one payment provider is a business’ decision it makes after determining its payment needs.

The researcher also found 73 percent of small business work with one payment provider to solve all their transaction needs.

How Payment Providers Are Serving Small Businesses

The study also sought to determine the critical role of some payment companies in microbusiness payment acceptance. Here’s an overview of the findings;

  • Square Inc. and Clover collectively made up for40 percent of the microbusiness payments acceptance market.
  • On top of Clover’s 20 percent, First Data Corp’s other solutions serve 13 percent of the microbusiness marketplace.
  • Serving more than 35 percent of the market share, Verifone is the most popular POS Terminal
  • Micros and NCR each made up for 12 percent of microbusiness payments acceptance
  • Shopkeep, Ingenico, Revel and Diebold collectively made up for the remaining share

The Verdict

The research shows that instant onboarding is no longer the icing on the cake. Microbusinesses must seek to understand the fee structure as well as the details of the payment solution to settle for what applies to their specific business cases.

Author bio: Michael Hollis is a Detroit native who now lives in Los Angeles. He is an account executive who has helped hundreds of business owners with their high risk business loan solutions. He’s experimented with various occupations: computer programming, dog-training, scientificating… But his favorite job is the one he’s now doing full time — providing
business funding for hard working business owners across the country.