Businesses with a high risk merchant account can still be profitable if they pivot their business.
The Covid-19 pandemic has greatly disrupted the US economy as many businesses were forced to close due to strict social distancing measures. The hardest hit were the small businesses where some had to temporarily halt operations, while others tragically had to close their doors for good.
Despite the uncertain landscape, there is a silver lining. A survey was conducted among just over 350 small businesses covering different industries and localities. The consulting firm, The Strawhecker Group in partnership with the Electronic Transactions Association, did substantiate what was already a morose reality, yet surprisingly, it also found something surprising.
The Results Are In
First the bad news. It was found that almost 40% of small business owners had been forced to temporarily or permanently close their businesses due to the Covid-19 pandemic. Those businesses that have been impacted the greatest include retailers, bars, and restaurants. Other segments that were discovered to be affected were nonprofits and schools.
Now, the good news. Although most businesses have faced a bleak predicament, the survey found that 31% of businesses have actually experienced an increase in sales. With health care providers leading this trend, a total of 66% of medically-connected businesses declared that they had seen higher sales.
Contactless Payments On The Rise
Another trend that was discovered was that contactless payments, mostly through contactless cards and smartphones, saw a 27% increase. This coincides with customers exercising extra caution by not handling cash or touching the POS systems while making purchases. So, unsurprisingly, there is now a boom in “card-not-present” commerce.
Card acceptance at terminals for food and beverage businesses has been eliminated by half. However, there has been a double increase in accepting credit cards over the phone as more restaurants are offering take-out and delivery.
For the 24% of small businesses still in operation, they have reported a boost in debit card use.
Despite the gloomy outlook evidenced by hundreds if not thousands of abandoned shops across the country, there are businesses that are pivoting their business models. Many are adapting their businesses to include options to shop for their products online as well as offering contactless payments.
Chargebacks And Fraud Never Sleep, Even During A Pandemic
Every major catastrophe has its opportunists, and this Covid-19 pandemic is no different. The pandemic has brought disastrous economic implications as many businesses have shut down, leaving many Americans under or completely unemployed. Some, in desperation, will be engaging in unsavory activities to earn quickly.
Jodie Kelley, CEO of ETA, gaver her thoughts on the survey results:
“In times like these, one of our most crucial tools for protecting ourselves and our economy is data, because it helps us understand what is actually happening to small business on a macro level as this pandemic advances.”
This Too Shall Pass
The Covid-19 pandemic has interrupted every fiber of our everyday lives. As individuals have had to learn to cope and adjust to a vastly different reality, so have businesses.
As clearly demonstrated in the survey, there are certain sectors that are thriving more than others. Yet, those that have learned to get creative and adjust their business models to the current landscape have already experienced their financial rewards.
It is this innovation in times of trouble that gives hope for a better tomorrow.