In the competitive landscape of payment processors dominated by giants like PayPal and Square, a recent survey sheds light on the satisfaction levels of Main Street small and medium-sized businesses (SMBs). The survey conducted reveals that a substantial 85% of Main Street SMBs are highly satisfied with their current payment processors. However, this leaves a competitive battleground for the remaining 15% of SMBs, opening up opportunities for processors to capture market share.
To deepen their presence and gain an edge in this market, payment processors must prioritize services, features, and functionalities that align with the specific needs and preferences of Main Street SMBs. The survey identifies key factors influencing SMBs' decisions to switch payment processors, with lower transaction fees emerging as the leading motivator, cited by 59% of SMBs. 42% of SMBs cited ease of use as a factor that would motivate them to switch, so it also plays a significant role.
Interestingly, the survey highlights variations in preferences across different segments, including construction, professional services, hospitality, and retail. Retail trade, professional services, consumer services/hospitality, and construction SMBs express interest in switching if offered lower transaction fees, indicating a demand for competitive pricing in these sectors.
For payment processors looking to gain a competitive advantage, focusing on competitive transaction fees, ease of use, reliability, and providing multiple payment options is crucial. Industry leaders like PayPal, Square, and QuickBooks have already established strong customer bases by emphasizing these key factors.
Additionally, the survey identifies hospitality and consumer services SMBs as the most likely to switch payment processors, presenting the next battleground for processors to win over customers. These segments reported the lowest levels of satisfaction with their current processors. Hospitality SMBs prioritize fraud prevention and customer support, while consumer services SMBs seek processors offering a variety of payment options.
Payment processors can further differentiate themselves by offering add-on services such as banking, credit, marketing, reporting, and data analytics. The report notes that construction SMBs and younger SMBs express interest in fraud detection and prevention, banking and credit services, and marketing support.
By addressing these needs through competitive pricing, user-friendly interfaces, reliable services, and additional offerings, payment processors can position themselves for success in a dynamic and evolving landscape.