80% of small businesses optimistic about the future, despite Covid challenges
Changing consumer behaviour the single biggest challenge for small business owners, Visa study finds
9 February 2021 | 0
Eight in ten small business owners in Ireland are optimistic about the future of their business, despite the many challenges Covid-19 has created.
The Visa Back to Business Study – 2021 Outlook found that although 37% of businesses surveyed feel the past year has been one of opportunity, 63% say their business is still recovering from the challenging year. The study found the single biggest business challenge arising from the pandemic is changing consumer behaviour, identified by almost one third (31%) of Ireland’s small businesses.
Nine in ten small business owners say they are dealing with a multitude of new challenges because of Covid-19 including; keeping staff safe (26%); access to capital (22%); employee retention (17%) and technological barriers (26%).
However, the Visa study also found that most (85%) small businesses have embraced new forms of technology enabling them to meet changing consumer behaviours and help their businesses survive and thrive through difficult times, such as selling online or offering click and collect services.
By the end of 2020, 80% of small businesses involved in the survey had made updates to their operations to match the rising demand for online shopping, including the 34% selling more online and the 38% of small businesses that had increased their targeted social media activity.
“Small businesses have shown determination and resilience throughout the pandemic, with many adapting quickly to a new normal,” said Dominic White, acting country manager Ireland, Visa. “As people continue to shop online and use digital payments in store, there is great opportunity for small businesses to keep innovating and finding new ways to serve their communities. With the support of our partners, we’re arming small businesses with tools and resources to empower them to maximise sales, so they can rebuild for long-term recovery”.
Accelerated shift to contactless
When Visa conducted its previous Back to Business study (June 2020), 15% of small businesses had started offering their customers contactless payment options for the first time. In less than six months, this figure has more than doubled, with 47% now saying they have newly introduced digital payment options – a clear sign of how far and fast behaviour has shifted since the pandemic.
This trend is set to continue as the majority (64%) of consumers surveyed say they will prefer to use contactless as much, if not more, after the pandemic. Further, 39% said that they wouldn’t shop at a store that didn’t offer a digital payment option.
In fact, 71% of those consumers surveyed are now using contactless whenever possible demonstrating the need for all retailers, regardless of size, to be able to accept digital payments to attract and retain customers.
Spotlight on security
With an increase in online shopping, both consumers and businesses report they are paying greater attention to security and fraud. The Visa study found that most (81%) consumers included in the study have recently taken some measure to protect themselves from fraud. More than half (51%) keep a close eye on their online transactions for any suspicious activity and 31% have recently updated the security on their devices.
But even with proactivity from consumers, businesses still have a crucial role to play in protecting payments. Last month, Strong Customer Authentication (SCA), a new EU regulatory requirement, aiming to reduce fraud, came into effect in Ireland. If businesses are not prepared, they may find that banks will decline customer payments.
SCA requires banks to check payments are being made by the correct cardholder – and not a fraudster – by asking them for two methods of identification such as a fingerprint or one-time passcode. By getting SCA-ready, SMEs can help make payments more secure and ensure their customers can still make online purchases quickly and easily.