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Pandemic Increases Mobile Use in Small Business Market

June 22, 2021

Small businesses are increasingly using online/mobile devices for a variety of financial activities. Usage of mobile and tablet devices to access business/corporate credit card accounts has expanded significantly. In addition, the incidence of small businesses using online/mobile devices to both make and accept payments is up. Much of the growth in usage of online/mobile services is due to the COVID-19 pandemic. These are among the findings from Credit Cards and the Small Business Market, a recent study conducted by Phoenix Synergistics (a unit of Phoenix Marketing International). The study included a national online survey of 1,000 small businesses with annual sales ranging from $50,000 to $5 million.

Small business credit card holders are increasingly using mobile and tablet devices to manage their business/corporate credit card accounts—including activities like reviewing balances, making transfers, and paying bills. When compared to 2019 data, the growth in usage of mobile phones and tablets to access small business credit card accounts appears dramatic. The incidence of usage of mobile phones increased from four in ten (42%) small business credit card holders in 2019 to six in ten (60%) in 2021. During the same time frame, usage of tablets to access business/corporate credit card accounts increased from close to three in ten (27%) to four in ten (40%) small business credit card holders. Incidence of usage of desktop/laptop computers for this purpose remained stable.

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In addition, small businesses report increased usage of online/mobile payment services due to the pandemic. Most (85%) small businesses indicate they use some type of online or mobile payment service to make purchases or payments. PayPal tops the list of specific services used, followed by Apple Pay and Google Pay. Close to half (46%) of users say they utilized these online/mobile payment services for the first time during the pandemic. An additional one-third (34%) of users report they are using these services more often due to the pandemic.

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More small businesses are also accepting payments from their customers through card readers attached to a mobile phone or tablet. Overall, two-thirds (66%) of small businesses say they accept payments with a mobile card-payment-processing service. Small businesses with annual sales of $50K to $99.9K are more likely to indicate offering this payment method when compared to larger companies in the market. A majority (56%) of users indicate they started using a mobile card-payment-processing service during the pandemic. Three in ten (31%) report increasing their usage of these services during the pandemic. The top mobile card-payment-processing services being used by small businesses are PayPal Here, Square, and PayAnywhere.

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Bill McCracken, president of Phoenix Synergistics, stated, “The pandemic has had a profound impact on small businesses and their usage of online and mobile devices—both to make payments and to receive payments from their customers. Financial-services providers will need to ensure they are offering top-quality mobile services and platforms for their small business clients. Credit card issuers face a challenge from third-party service providers, who are active in both mobile payments and mobile card-payment-processing. It seems likely that usage of mobile in various ways in the small business market will continue to increase in the post-pandemic environment.”

These are among the findings from a recent Phoenix Synergistics study, Credit Cards and the Small Business Market, which features 1,000 online interviews with owners and executives of small businesses with annual sales of $50,000 to $5 million.

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