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Payments Pulse Survey: Small Business Edition

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Of the over one million employer businesses in Canada, 99.7 per cent represent small and medium-sized enterprises (SMEs), leaving 0.3 per cent representing large businesses. As a key economic driver, Payments Canada decided to focus a survey specifically on the payment interests of Canadian SMEs, Payments Pulse Survey: Small Business Edition.

Building on our E&Y report How can payments modernization benefit Canadian businesses? released earlier this year, we dug deeper to find out how payments systems meet SMEs’ business needs, how inefficiencies in current payments processing impact SMEs and how SMEs anticipate benefiting from a new payments system.

The introduction of new systems, rules and standards as part of Payments Canada’s Modernization program will foster a faster, safer and more data-rich payments environment. The top anticipated enhancements will come from new real-time payments, giving small businesses more choice in how they make their payments, and the adoption of the ISO 20022 data standard, which has the potential to improve automation and efficiency by increasing the data that travels with a payment.

What we heard loud and clear is that Canadian SMEs are ready for more payment options. They want more choice for their customers at point-of-sale and more options for their back-office payments to suppliers and vendors, such as e-transfers, e-wallets and the digital currencies. And of course, they want their payments to be safe and secure.

Finally, the survey found that overwhelmingly the majority of SMEs are willing to integrate new technologies into their operations to meet future payment needs.

Published in: Economy & Finance
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Payments Pulse Survey: Small Business Edition

  1. 1. PAYMENTS PULSE SURVEY: SMALL BUSINESS EDITION MARCH 15, 2018
  2. 2. FOREWORD Of the over one million employer businesses in Canada, 99.7 per cent represent small and medium-sized enterprises (SMEs), leaving 0.3 per cent representing large businesses. As a key economic driver, Payments Canada decided to focus a survey specifically on the payment interests of Canadian SMEs, Payments Pulse Survey: Small Business Edition. Building on our E&Y report How can payments modernization benefit Canadian businesses? released earlier this year, we dug deeper to find out how payments systems meet SMEs’ business needs, how inefficiencies in current payments processing impact SMEs and how SMEs anticipate benefiting from a new payments system. The introduction of new systems, rules and standards as part of Payments Canada’s Modernization program will foster a faster, safer and more data-rich payments environment. The top anticipated enhancements will come from new real-time payments, giving small businesses more choice in how they make their payments, and the adoption of the ISO 20022 data standard, which has the potential to improve automation and efficiency by increasing the data that travels with a payment. What we heard loud and clear is that Canadian SMEs are ready for more payment options. They want more choice for their customers at point-of-sale and more options for their back-office payments to suppliers and vendors, such as e-transfers, e-wallets and the digital currencies. And of course, they want their payments to be safe and secure. Finally, the survey found that overwhelmingly the majority of SMEs are willing to integrate new technologies into their operations to meet future payment needs.
  3. 3. KEY FINDINGS 81% Of Canadian small businesses are willing to integrate new technologies into their operations 88% Of newer Canadian small businesses (in operation 10 years or less) are willing to do the same Are willing to move away from cash, if they had other options Willing 61% Unwilling 30% 61% Are willing to move away from cheques, if they had other options Willing 67% Unwilling 25% 67% Believe that it is important that the payments industry continues to evolve Important 87% 87% 52% Say that e-transfers are a payment method they would like to have available for customers The barriers to adopting new payment methods 1. 2. The cost per transaction The cost per implementation 49% Say that safety and security is paramount in terms of payment priorities
  4. 4. METHODOLOGY QUANTITATIVE RESEARCH INSTRUMENT A survey of 303 Canadian small business owners was completed online between December 29, 2017 to January 10, 2018 using Leger’s online panel, LegerWeb. A probability sample of the same size would yield a margin of error of +/-5.6%, 19 times out of 20. In order to qualify: • The size of the small business could not exceed 499 employees; • Respondents needed to be at least partly responsible for decisions about the business’ payment methods; and • Businesses need to fall into a set list of industries (i.e. retail, consultancy, services, manufacturing, wholesale trade, or hospitality). ABOUT LEGER’S ONLINE PANEL Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90%. QUALITY CONTROL Stringent quality assurance measures allow Leger to achieve the high-quality standards set by the company. As a result, its methods of data collection and storage outperform the norms set by WAPOR (The World Association for Public Opinion Research). These measures are applied at every stage of the project: from data collection to processing, through to analysis. We aim to answer our clients’ needs with honesty, total confidentiality, and integrity.
  5. 5. RESPONDENT PROFILE
  6. 6. RESPONDENT PROFILE Men 60% Wome n 40% 16% 24% 26% 24% 9% 1% 18-34 35-44 45-54 55-64 65+ REFUSAL AGEGENDER Base: All (n=303). < 45 40% 45+ 59% SIZE OF THE BUSINESS 23% 27% 24% 8% 17% 1 2-9 10-50 51-100 101+ <10 50% 10+ 50% MEAN 59.2 employees REGION QUE 26% WEST 32% ATL 011% ON 31%
  7. 7. RESPONDENT PROFILE 34% 19% 24% 14% 9% < $250 K $250 K - < $1 M $1 M - $4.9 M $5 M+ REFUSAL YEARS IN BUSINESS REVENUE DECISION-MAKING RE: PAYMENT METHODS 1% 8% 14% 16% 11% 11% 32% 5% 4% < 1 year 1-4 5-9 10-14 15-19 20-24 25-50 51+ REFUSAL INDUSTRY Base: All (n=303). 30% 70% Myself Shared with Someone else 42% 23% 16% 10% 5% 4% SERVICES CONSULTANT RETAIL MANUFACTURING WHOLESALE TRADE HOSPITALITY <10 22% 10+ 74% MEAN 21.3 years
  8. 8. DETAILED RESULTS 1. Payments
  9. 9. 51% PROCESS ANYWHERE UP TO 500 PAYMENTS A MONTH; 39% PROCESS MORE THAN THAT. 0001 On average, how many payments does your business make and receive in a month? Please consider point-of-sale to the customer, and payments to and from suppliers. Base: All (n=303). 1% 51% 9% 9% 6% 4% 3% 8% 9% 0 1-500 501-1000 1001-1500 1501-2000 2001-2500 2501-3000 More than 3000 I don't know / I prefer not to answer PAYMENTS MADE AND RECEIVED IN A GIVEN MONTH 39% process more than 500 payments in a given month. Fifty-one percent of those surveyed say their business processes anywhere up to 500 payments per month. Four- in-ten (39%) process more than that, with 29% processing more than 1000 payments per month. (Relatively few [8%] process more than 3000 payments each month.) Not surprisingly, the number of payments made and received in a month increases along with the size of the business, how long the business has been around, and how much revenue it makes in a year. Interestingly, businesses in Atlantic Canada are least likely to be processing more than 1000 payments a month (12% vs. 48% among those in Quebec, Ontario, or the West).
  10. 10. CASH AND CHEQUES ARE STILL POPULAR METHODS OF RECEIVEING PAYMENT FROM CUSTOMERS.TOP6 0005 Which are your preferred methods to receive payment from customers? Base: All (n=303). 99% 52% 50% 49% 48% 37% 37% 23% 13% 10% 4% 4% <1% <1% 1% ANY Cheque Credit Card E-Transfers Cash Debit Automated funds transfer / direct deposit PayPal Contactless/Tap E-Wallet Check-out free transactions Digital currency Other None of the above I don’t know / I prefer not to answer PREFERRED METHODS OF RECEIVING PAYMENT FROM CUSTOMERS 90% selected a cashless method. Respondents selected 3.3 methods, on average. 18% 81% 1 2 + Despite the fact that 90% selected some sort of cashless method, cash and cheques are still popular methods of receiving payment from customers; roughly half of those surveyed count cheques (52%) and/or cash (48%) as part of their preferred method(s) of receiving payment from customers, and both methods make it into the Top Six. Overall, though, methods are varied. Most small business owners chose at least two (81%), the average be 3.3. Cheques top the list.
  11. 11. E-TRANSFERS AND CREDIT CARDS ARE TWO OF THE MANY METHODS THAT SHOULD BE AVAILABLE TO CUSTOMERS.TOP5 0007 From the following list, what payment methods would you like to have available to your customers? Base: All (n=303). 92% 52% 50% 42% 41% 41% 33% 27% 20% 19% 8% 8% <1% 4% 4% ANY E-Transfers Credit Card Cash Cheque Debit Automated funds transfer/ direct deposit PayPal E-Wallet Contactless/Tap Check-out free transactions Digital currency Other None of the above I don’t know / I prefer not to answer METHODS THEY’D LIKE TO HAVE AVAILABLE FOR THEIR CUSTOMERS 89% selected a cashless method. Respondents selected 3.7 methods, on average. 17% 76% 1 2 + The same five methods of payment that businesses prefer to receive from customers are also the payment methods they would like to have available for their customers. Cash and cheques remain in the Top Five. Overall, methods remain varied. Most small business owners chose at least two (76%), the average be close to four (3.7). E-transfers top the list.
  12. 12. BUSINESS OWNERS ARE LOOKING FOR MORE METHODS. 0005 Which are your preferred methods to receive payment from customers? 0007 From the following list, what payment methods would you like to have available to your customers? Bases: All (n=303). PAYMENT METHODS SUMMARY: RECEIVING PAYMENT FROM CUSTOMERS 49% 50% 48% 52% 37% 37% 23% 10% 13% 4% 4% 52% 50% 42% 41% 41% 33% 27% 20% 19% 8% 8% E-Transfers Credit Card Cash Cheque Debit Automated funds transfer / direct deposit PayPal E-Wallet Contactless/Tap Check-out free transactions Digital currency PREFERRED METHODS FOR RECEIVING PAYMENT FROM CUSTOMERS (MEAN: 3.3) METHODS THEY WOULD LIKE TO HAVE AVAILABLE FOR CUSTOMERS (MEAN: 3.7) When what’s currently preferred is analyzed against what should be available, it’s obvious small business owners want more options (3.7 vs. the 3.3 they currently prefer, on average). There appears to be less of a need for cheques, but more of a need for things like e-wallet, contactless tap, and check-out free transactions.
  13. 13. METHODS TO PAY VENDORS ARE VARIED, BUT CREDIT CARDS AND CHEQUES ARE AMONG THE MOST POPULAR.TOP6 0006 Which are your preferred methods to pay vendors and suppliers? Base: All (n=303). 99% 58% 47% 32% 23% 23% 21% 19% 7% 5% 4% 3% <1% <1% ANY Credit Card Cheque E-Transfers Cash Automated funds transfer/ direct deposit Debit PayPal Contactless/Tap E-Wallet Check-out free transactions Digital currency None of the above I don’t know / I prefer not to answer PREFERRED METHODS OF PAYING VENDORS AND SUPPLIERS 88% selected a cashless method. Respondents selected 2.4 methods, on average. 36% 64% 1 2 + The preferred methods to pay vendors and suppliers are quite varied. Most small business owners (64%) chose at least two, the average being 2.4 methods. The most popular is a credit card (58%). Cheques are more popular than cash (47% vs. 23%), but both methods make it into the Top Six. Credit cards lead the pack.
  14. 14. CREDIT CARDS, CHEQUES, AND E-TRANSFERS ARE POPULAR WAYS TO PAY VENDORS AND SUPPLIERS.TOP5 0008 From the following list, what payment methods would you like to have available to pay your vendors and suppliers? Base: All (n=303). 93% 56% 46% 42% 30% 28% 26% 23% 12% 8% 8% 5% <1% 2% 5% ANY Credit Card Cheque E-Transfers Automated funds transfer/ direct deposit Debit Cash PayPal E-Wallet Digital currency Contactless/Tap Check-out free transactions Other None of the above I don’t know / I prefer not to answer METHODS THEY’D LIKE TO HAVE AVAILABLE TO PAY VENDORS AND SUPPLIERS 87% selected a cashless method. Respondents selected 3.0 methods, on average. 28% 65% 1 2 + The same five methods of payment that business’ prefer to pay vendors and suppliers are also the payment methods they would like to have available to do so. Overall, methods remain varied. Most respondents (65%) chose at least two, the average being 3.0. Credit cards lead the pack.
  15. 15. BUSINESS OWNERS ARE LOOKING FOR MORE METHODS. 0006 Which are your preferred methods to pay vendors and suppliers? 0008 From the following list, what payment methods would you like to have available to pay your vendors and suppliers? Bases: All (n=303). PAYMENT METHODS SUMMARY: PAYING VENDORS AND SUPPLIERS 58% 47% 32% 23% 21% 23% 19% 5% 3% 7% 4% 56% 46% 42% 30% 28% 26% 23% 12% 8% 8% 5% Credit Card Cheque E-Transfers Automated funds transfer / direct deposit Debit Cash PayPal E-Wallet Digital currency Contactless/Tap Check-out free transactions PREFERRED METHODS FOR PAYING VENDORS AND SUPPLIERS (MEAN: 2.4) METHODS THEY WOULD LIKE TO HAVE AVAILABLE TO PAY VENDORS AND SUPPLIERS (MEAN: 3.0) When what’s currently preferred is analyzed against what should be available, it’s obvious small business owners want more options (3.0 vs. the 2.4 they currently prefer, on average). There appears to be a need for things like: e- transfers, e-wallets, and digital currency options.
  16. 16. 51% MAKE BUSINESS PAYMENTS INTERNATIONALLY. 39% DO NOT. 0003 What percentage of your business’ payments are made internationally? Base: All (n=303). PERCENTAGE OF THE BUSINESS’ PAYMENTS THAT ARE MADE INTERNATIONALLY 39% 30% 12% 6% 4% 10% 0 1-25 26-50 51-75 76-100 I don't know / I prefer not to answer 51% make business payments internationally. MEAN (including 0): 16% MEAN (excluding 0): 28% Half of those surveyed (51%) make business payments internationally. This is more likely to be the case among more established businesses: • 10 or more employees (68% vs. <10 employees: 34%); • 10 or more years in business (57% vs. <10 years: 36%); • 501+ payments in a month (81% vs. 500 or less: 35%); • $250K+ in revenue (68% vs. <$250K: 28%). As a result, the percentage of payments made internationally increases along with the size of the business, how long the business has been around, and how much revenue it makes in a year.
  17. 17. 23% DO NOT DEAL WITH ONLINE TRANSFERS. AMONG THOSE WHO DO, THE AVERAGE AMOUNT IS 31%. 0017 What percentage of your payments comes from online transfers, such as PayPal or Interac? Base: All (n=303). PERCENTAGE OF THE BUSINESS’ PAYMENTS THAT COME FROM ONLINE TRANSFERS 23% 36% 17% 10% 5% 9% 0 1-25 26-50 51-75 76-100 I don't know / I prefer not to answer 69% have payments that come from online transfers (i.e. PayPal or Interac). MEAN (including 0): 23% MEAN (excluding 0): 31% Sixty-nine percent have payments that come from online transfers. This is especially true among businesses processing 501+ payments in a month (79% vs. 500 or less: 66%), and businesses processing international payments (86% vs. 52% among those who do not).
  18. 18. 54% BELIEVE THEIR BUSINESS SPENDS TOO MUCH TIME ON PAYMENT PROCESSING ACTIVITIES. 0011 Do you feel your business spends too much time on any of the following payments processing activities? Base: All (n=303). DOES YOUR BUSINESS SPEND TOO MUCH TIME ON CERTAIN PAYMENT PROCESSING ACTIVITIES? 54% 25% 22% 19% 15% 12% 12% 41% 5% YES Tracking payments Matching payments to invoices Cheque remittance Cheque Issuance Reviewing unapplied cash Forecasting cash flow (or managing cash flow) None of the above I don’t know / I prefer not to answer Yes, on cheques (issuing or remitting): 27% Yes, on payments (tracking and/or matching): 38% Over half the small business owners (54%) believe their business spends too much time on payment processing activities, like tracking payments and/or matching payments to invoices. These businesses are more likely to be larger, more established ones: • 10 or more employees (75% vs. <10 employees: 33%); • 25 or more years in business (62% vs. <10 years: 46%); • 501+ payments in a month (72% vs. 500 or less: 38%); • $250K+ in revenue (70% vs. <$250K: 32%).
  19. 19. SAFETY AND SECURITY IS PARAMOUNT. 0021 Rank the following three payment priorities in order of importance to your business. Base: All (n=303). THE PERCENTAGE OF THE TIME A PAYMENT PRIORITY WAS RANKED FIRST: SAFETY AND SECURITY Ensuring all payments are completed within a private and secure environment.49% LOW-COST TRANSACTION FEES A Reduction in the cost per transaction fees applied to the acceptance and/or processing of all payment options, outside of cash and cheques. 34% FASTER PAYMENT PROCESSING Receiving payments in real time, improving cash-flow.14% When asked to rank these payment priorities in order of importance, nearly half of small business owners (49%) placed safety and security first. While faster payment processing was ranked first far less often (14% ), it was more than two times more likely to placed first by larger companies: • 10 or more employees (21% vs. <10 employees: 3%); • $250K+ in revenue (19% vs. <$250K: 9%). Not surprisingly, small business owners who believe current payment processing fees are unfair are nearly two times more likely to rank low-cost transaction fees first (47% vs. 21% among those who believe the fees are fair).
  20. 20. CURRENT PAYMENT PROCESSING FEES AREN’T FAIR. 0019 To what extent do you agree with the following statement? “I feel the current fees associated with processing payments are fair.” Base: All (n=303). “THE CURRENT FEES ASSOCIATED WITH PROCESSING PAYMENTS ARE FAIR.” 10% STRONGLY AGREE 18% STRONGLY DISAGREE 50% 44% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% AGREE (NET) DISAGREE (NET) I don't know / I prefer not to answer Small business owners are somewhat divided over whether or not current payment processing fees are fair: four-in-ten (44%) believe they are, while 50% believe they are not. Small business owners who agree, are more likely to be those with an established business: • 10 or more employees (55% vs. <10 employees: 32%); • 25 or more years in business (53% vs. <10 years: 33%); • 501+ payments in a month (59% vs. 500 or less: 32%); • $250K+ in revenue (53% vs. <$250K: 33%); • international payments (54% vs. none: 28%). The opposite holds true for those who disagree.
  21. 21. DETAILED RESULTS 2. New Technology
  22. 22. 81% WOULD BE WILLING TO INTEGRATE NEW TECHNOLOGIES INTO THEIR OPERATIONS. 0004 Which of the following best describes your willingness to integrate new technologies into your operations? Base: All (n=303). ARE YOU WILLING TO INTEGRATE NEW TECHNOLOGIES INTO YOUR BUSINESS? 18% 81% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% WILLING (NET) UNWILLING (NET) I don't know / I prefer not to answer 5% STRONGLY DISLIKE the disruption it causes. 46% STRONGLY SUPPORT new technologies that help their bottom line. The vast majority (81%) is willing to integrate new technologies into their operations. A willingness to accept new technologies is stronger among: • newer businesses (<10 years in business: 88% vs. 10+: 83%); • business that don’t receive monthly payments in cash (90% vs 79% among business that do); and • business willing to move away from cash (84% vs 70% among business that are unwilling).
  23. 23. PAPER-LESS PAYMENTS ARE EXCITING, BUT INTELLIGENT ROBOTS ARE A SOURCE OF ANXIETY. 67% 55% 49% 47% 43% 39% 24% 34% 44% 36% 45% 50% EXCITED (NET) ANXIOUS (NET) I don't know / I prefer not to answer 0020 To what extent do you feel excited or anxious, when it comes to each of the following? Base: All (n=303). EXCITED OR ANXIOUS ABOUT ANY OF THE FOLLOWING? Paper-less payments E-wallets and e-payments (i.e. Apple Pay, Google Wallet, etc.) Self-driving vehicles Connecting to customers via virtual or augmented reality Artificially intelligent robots An artificially intelligent robotic workforce Paper-less payments are exciting for about seven-in-ten (67%) small business owners, but levels of anxiety increase steadily along with the complexity of the innovation presented (i.e. an artificially intelligent robotic workforce shows the highest levels of anxiety). Demographically, businesses willing to move away from cash and cheques are more likely to be very excited about most of the technological innovations tested.
  24. 24. THE PAYMENTS INDUSTRY MUST CONTINUE TO EVOLVE. 0022 To what extent do you believe it is important that the payments industry continues to evolve and offer services that streamline the processing and reconciliation of payments in Canada? Base: All (n=303). IS IT IMPORTANT THAT THE PAYMENTS INDUSTRY CONTINUES TO EVOLVE AND OFFER SERVICES THAT STREAMLINE THE PROCESSING AND RECONCILLIATION OF PAYMENTS IN CANADA? 10% 87% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% IMPORTANT (NET) UNIMPORTANT (NET) I don't know / I prefer not to answer 36% believe this is VERY IMPORTANT. 1% believes this ISN’T IMPORTANT AT ALL. About nine-in-ten (87%) small business owners think it is important that the payments industry continues to evolve. This is especially true for business owners: • willing to move away from cash and cheque payments (95% apiece), • who deal with international payments (91%), • who believe the current payment processing fees are fair (93%), and • who are willing to pay a transacting fee for modernized systems (95%).
  25. 25. DETAILED RESULTS 3. New Payment Methods
  26. 26. DECISIONS TO ADOPT NEW PAYMENT METHODS ARE OFTEN INFLUENCED BY A BUSINESS’ CUSTOMERS. 0009 Who influences your decision to adopt new payment methods? Base: All (n=303). INFLUENCERS 87% 50% 29% 26% 17% 17% 16% 12% 3% 10% 3% ANY My customers My vendors and suppliers My financial institution My payments services provider My peers and competition My accounting software provider My IT provider Other None of the above I don’t know / I prefer not to answer When deciding on adopting new payment methods, eighty-seven percent say there are influencers, especially those from larger companies: • 10 or more employees (95% vs. <10 employees: 79%); • $250K+ in revenue (94% vs. <$250K: 78%); • international payments (94% vs. none: 79%). The biggest influencers? Customers (50%).
  27. 27. YES, THERE ARE USUALLY BARRIERS TO ADOPTING NEW PAYMENT METHODS. 0010 What, if any, barriers do you experience when adopting new payment methods into your business? Base: All (n=303). BARRIERS 77% 47% 35% 31% 22% 21% 20% 1% 16% 9% 8% 6% 3% ANY Costs per transaction Cost of implementation Security concerns Lack of customer demand for change Time and cost of training Vendors and suppliers are not technically compatible with new system Other FEW TO NO BARRIERS I have experienced few to no barriers I don’t see any barriers I have yet to adopt a new payment method into my business I don’t know / I prefer not to answer Nearly eight-in-ten (77%) experience at least one barrier when adopting new payment methods into their business. This is especially true for owners of larger businesses: • 10 or more employees (86% vs. <10 employees: 68%); • 501+ payments in a month (88% vs. 500 or less: 73%); • $250K+ in revenue (85% vs. <$250K: 68%); • international payments (85% vs. none: 69%). One of the main barriers is the cost per transaction (47%). Sixteen percent have experienced few, if any, barriers, but these respondents are more likely to be from smaller, less established companies (i.e. fewer than ten employees [23%]; <$250K in revenue [24%]; 500 or fewer payments per month [21%]).
  28. 28. FOR 24%, NO MONTHLY PAYMENTS ARE MADE IN CASH. 0012 What percentage of your monthly payments from customers is completed in cash? Base: All (n=303). MONTHLY PAYMENTS MADE IN CASH 24% 41% 11% 7% 7% 10% 0 1-25 26-50 51-75 76-100 I don't know / I prefer not to answer 66% have cash payments each month from customers. MEAN (including 0): 21% MEAN (excluding 0): 29% Most of the small business owners surveyed (66%) have at least some monthly payments from customers that are completed in cash. The average proportion, among those who do, is 29%. Twenty-four percent do not receive any cash payments from customers, bringing the average proportion down to 21%, overall. These businesses are two times more likely to be smaller (i.e. <10 employees [34% vs. 10+: 15%]), and three times more likely to be processing 500 or fewer payments per month (35% vs. 501+: 9%). These businesses are also statistically less likely to be making or receiving international payments (39% vs. 17% among those that do).
  29. 29. 0013 To what extent are you willing to move completely away from using cash to electronic payments? Base: All (n=303). WILLINGNESS TO MOVE AWAY FROM CASH 7% 30% 61% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% WILLING (NET) UNWILLING (NET) I don't know / I prefer not to answer I don't accept cash 30% are VERY WILLING. 14% aren’t WILLING AT ALL. Most small business owners (61%) are willing to move away from cash and embrace electronic payment methods, 30% of whom are very willing. Demographically, those willing to make the transition tend to be from businesses: • with 10 or more employees (69% vs. <10: 53%), • making/receiving international payments (66% vs. 55% among those who do not), • not receiving any cash payments in the first place (71% vs. 58% among those who are); • willing to move away from using cheques as well (75% vs. 31% who are not), and • from Ontario (75% vs. 55% among businesses located anywhere else in Canada). MOST ARE WILLING TO MOVE AWAY FROM CASH.
  30. 30. MOST ARE WILLING TO MOVE AWAY FROM CASH. 0013 To what extent are you willing to move completely away from using cash to electronic payments? Base: Everyone but those who mentioned they don’t accept cash (n=283). WILLINGNESS TO MOVE AWAY FROM CASH 32% 65% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% WILLING (NET) UNWILLING (NET) I don't know / I prefer not to answer 32% are VERY WILLING. 14% aren’t WILLING AT ALL. Willingness to move away from cash in favour of electronic payments is virtually unchanged when those who don’t accept cash are removed from the analysis.
  31. 31. 32% OF THE CUSTOMER PAYMENTS RECEIVED ARE CHEQUES. 0014 What percentage of your monthly payments from customers is completed by cheque? Base: All (n=303). MONTHLY PAYMENTS MADE BY CHEQUE FROM CUSTOMERS 15% 34% 18% 13% 11% 9% 0 1-25 26-50 51-75 76-100 I don't know / I prefer not to answer 76% have payments each month from customers using a cheque. MEAN (including 0): 32% MEAN (excluding 0): 38% Most small business owners (76%) have payments each month from customers that are completed using a cheque. The average proportion, among those who do, is 38%. Fifteen percent do not receive any cheque payments from customers, especially smaller businesses (i.e. <10 employees [22% vs. 10+: 8%], making <$250K per year in revenue [20% vs. $250K+: 9%]). Businesses using cheques for expenses/suppliers are more likely to be receiving cheque payments from customers as well (83% vs. 67% among those who do not).
  32. 32. 60% USE CHEQUES TO PAY EXPENSES / SUPPLIERS. 0015 Do you pay suppliers/expenses by cheque? Base: All (n=303). 60%36% Yes No I don't know / I prefer not to answer PAYMENTS MADE BY CHEQUE TO SUPPLIERS / FOR SUPPLIERS Most small business owners (60%) are using cheques for expenses and/or suppliers, especially those from larger businesses: • 10 or more employees (68% vs. <10 employees: 52%); • 10 or more years in business (65% vs. <10 years: 43%); • $250K+ in revenue (70% vs. <$250K: 44%). Those who accept customer payments by cheque are more likely to be using cheques to pay expenses / suppliers as well (66% vs. 29% among those who do not).
  33. 33. MOST WOULD BE WILLING TO MOVE AWAY FROM CHEQUES. 0016 To what extent are you willing to move completely away from using cheques for convenient electronic payments? Base: All (n=303). 25% 67% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% WILLING (NET) UNWILLING (NET) I don't know / I prefer not to answer WILLINGNESS TO MOVE AWAY FROM USING CHEQUES Nearly seven-in-ten (67%) small business owners are willing to move away from cheques in favour of more convenient electronic payments, 30% of whom are very willing. Regionally, however, Quebec’s small business owners are less willing than small business owners anywhere else in Canada (54% vs. 72%, respectively). Those willing to move away from cash are more likely to move away from cheques as well (83% vs. 37% among those unwilling to move away from cash). 30% are VERY WILLING. 9% aren’t WILLING AT ALL.
  34. 34. MOST WOULD BE WILLING TO MOVE AWAY FROM CHEQUES. 0016 To what extent are you willing to move completely away from using cheques for convenient electronic payments? Base: Those using cheques to pay expenses and/or suppliers and receiving cheques from customers (n=156). 31% 69% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% WILLING (NET) UNWILLING (NET) I don't know / I prefer not to answer WILLINGNESS TO MOVE AWAY FROM USING CHEQUES When those still accepting cheque payments from customers and using cheques to pay expenses and/or suppliers are examined in isolation, willingness to move away from cheques isn’t much higher than what was witnessed overall (see previous slide). 24% are VERY WILLING. 12% aren’t WILLING AT ALL.
  35. 35. 56% WOULD CONSIDER A TRANSACTION FEE, IF THE NEW, MODERNIZED SYSTEM SAVED THEM MONEY. YES 13% 0018 Would you be willing to pay a transaction fee (per electronic payment received automatically), if the new, modernized system saved your business more money on reconciling monthly invoices? Base: All (n=303). 018b Would the added savings in efficiencies be incentive enough to pay for a transaction? Base: Those willing to pay the transaction fee (n=169) / Those unwilling to pay the transaction fee (n=119). WILLINGNESS TO PAY A TRANSACTION FEE 39% 56% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% WILLING (NET) UNWILLING (NET) I don't know / I prefer not to answer YES 59% Most small business owners (56%) would be willing to pay a transaction fee if the new system saved their business money on reconciling monthly invoices each month. Willingness is particularly keen among larger businesses: • 10 or more employees (73% vs. <10 employees: 39%); • 501+ payments in a month (74% vs. 500 or less: 43%); • $250K+ in revenue (69% vs. <$250K: 40%). Willingness is also statistically higher among those willing to move away from cash (67%) and/or cheques (65%), relative to those who aren’t (38% and 39%, respectively). Among those willing to pay the transaction fee, most (59%) believe the added savings in efficiencies is incentive enough to pay for a transaction. WOULD THE ADDED SAVINGS IN EFFICIENCIES BE INCENTIVE ENOUGH TO PAY FOR A TRANSACTION?
  36. 36. ABOUT PAYMENTS CANADA Payments Canada ensures that financial transactions in Canada are carried out safely and securely each day. The organization underpins the Canadian financial system and economy by owning and operating Canada’s payment clearing and settlement infrastructure, including associated systems, bylaws, rules and standards. The value of payments cleared by Payments Canada’s systems in 2017 was approximately $50 trillion or $200 billion every business day. These encompass a wide range of payments made by Canadians and businesses involving inter-bank transactions, including those made with debit cards, pre-authorized debits, direct deposits, bill payments, wire payments and cheques.

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