Unlocking the potential of Europe’s small and medium businesses

In this rapidly evolving digital landscape, small and medium-sized businesses (SMBs) make up the heart of the European economy, accounting for more than half of Europe's GDP, employing around 100 million people and creating 61% of jobs in Europe¹. Despite their economic significance, a substantial number of these businesses are yet to embrace digital payment methods, with 34% of small and micro businesses not accepting card payments today. This trend presents a remarkable opportunity for payment providers to expand their reach and foster card acceptance across Europe.

For SMBs the benefits of digital payments are widespread. From a personalised and more seamless consumer journey to a reduction in fraudulent behaviour or even the ability to reach across the global, the acceptance of cards provides a platform for businesses to expand, streamline operations, and enhance the customer experience. As well as ensuring they are well-positioned to thrive in the digital age. Visa is committed to understanding the challenges and opportunities that are faced by small businesses and conducts annual research² and surveys¹ to understand the current state of play and explore the factors that continue to influence their growth.

Here are the top three trends from the research:

1. Digital payments as the catalyst for growth of SMBs

The survey has shown that by accepting digital payments, through card or mobile phone, businesses can positively impact their balance sheet. As two-thirds (67%) of European small businesses now accept debit or credit payments, the survey has highlighted the benefits of digitisation: with more than half of the businesses surveyed (55%) agreeing that customers spend more when they use cards, and 41% seeing an increase in turnover after they started accepting digital payments, ranging between 6% and 15%.

The challenge for payment providers lies in convincing these businesses of the multifaceted benefits that card acceptance and digital payments provide. The research also highlighted that non-acceptor SMBs would consider card acceptance if provided with innovative solutions like Tap to Phone and readily available consumer behaviour data.

2. Reliable payments are critical for small businesses

Reliable and resilient payments systems are critical for the survival and growth of businesses, ensuring that transactions can be carried out smoothly and both customers and businesses can trust that they can pay and be paid.

The survey has shown 67% of small businesses found card payments to be the simplest form of payment, demonstrating the value of digitisation. 62% of digital payment users also agreed that taking card payments meant that they get paid faster, while two thirds (66%) agreed that card payments also reduced the risk of not getting paid.

The need for stability and reliability from their payment providers was also reflected in the research with the businesses prioritising access to customer service (77%), same day settlement (78%) and fraud and security tools (77%).

3. The role of ‘one-stop shop’

The increasing role and desire for a ‘one-stop- shop’ for busy SMBs is a significant trend. SMBs have various time-consuming responsibilities but, often, little time on their hands, so to manage this SMBs are currently adopting multiple platforms to encompass their payments needs, with 31% of SMBs using software providers who utilise online banking apps, 25% who use accounting tools and 22% using sales tracking tools, there is opportunity for streamlining.

This trend is a result of individual players being able to serve different needs of SMBs effectively, reflected in the data that 74% of SMBs expect to full customisation over the services they use.

How Visa is enabling small businesses to unlock future economic growth

Damijan Pezdicek, Director for Small-Medium Business (SMB), Visa Europe:

'To understand the untapped potential of SMB card acceptance in Europe, payment providers need to tailor their offerings to the customers' needs, communicate clearly, and distribute efficiently. A holistic proposition that includes "Pay & be Paid" services, support on fee deferment, and lending solutions can increase loyalty and help SMBs overcome common challenges. he introduction of contactless payments has been a gamechanger for many of them, now accounting for 89% of Visa in-store payments, and we're working closely with partners to ensure that businesses of all sizes are plugged in and ready for the next generation of payments.'

This dedicated support being provided through our network will be critical to unlocking the potential of businesses across Europe, helping local communities and economies thrive by providing more choice and better experiences. We’re proud to play our part, providing businesses with easy-to-access resources, expert advice, and best-in-class payment solutions to help supercharge their growth.