Spend Insights - Visa

Visa Small Business 3Q16 Report December 2016Spend Insights“Although card acceptance is growing among all small businesses, data shows it’s growing more rapidly among those with lower revenue. Efforts to educate thisaudience may be paying off as it seems they are beginning to realize the benefits and importance of cards — a sign that financial institutions may want to maintainor even increase these efforts.”— Janet Zablock, Head of Global Small Business, Visa Inc.Findings at a glanceCard acceptanceAcquiring new customersBusiness size seems to be related to card acceptance.According to responses, businesses with 500K areadopting card acceptance faster than those with 500K– 1M in revenue.Read more Added focus on marketing appears to be payingoff for many small business owners as theirresponses show growing optimism about marketingeffectiveness and attracting new customers.Read more Adjusting for growthLoan demand decreaseChanging outlooks on revenue and profit may becausing businesses to hold off on key expenses like capitalinvestments, employee pay and inventory.Read more Several signals — including improved outlooks oncash flow — point to a potential dip in small businessowners’ needs to borrow money.Read more Macroeconomic impact: 3Q16 concernsSince 3Q13, consumer confidence and inflationhave consistently ranked as small businessowners’ #1 or #2 macroeconomic concerns,although it’s not always clear how thesefeelings affect business decisions. This quarterhowever, it seems these concerns may becompounded by fears of stagnant revenueand profits, leading owners to dial back keyexpenses. See page 3 for more.

Visa Small Business 3Q16 Report Page 2Card acceptanceBusiness revenue may impact card acceptanceCredit and debit acceptance has spiked in the past year driven by speed, ease of use and customer demand. However, acceptance rates forthe past 12 months compared to overall acceptance rates show lower-revenue small businesses are adopting cards increasingly faster than others.Key drivers of card acceptanceWhen asked why they accept credit and debit cards, small business owners’ top responses centered around speedand convenience, but also cited customer demand.¹payments prefer directly helpsquare accommodate cashbest mobile faster easydemandconveniencenow paymentfasterimmediatenecessarySpend InsightGrowth in card acceptance is fastest among lower-revenue businessesAlthough card acceptance is significantly higher among businesses with 500K– 1M in revenue, growth has recently been fasteramong businesses with revenue of less than 500K. Speed and convenience were cited as key drivers, meaning banks’ efforts topromote these benefits could be having the desired impact.47%— Tourism/entertainmentsquare everyone acceptsusedepositoptions chargedcheaperacceptservicesnowthings bestrequestedaccommodate less prefer cheaper everyone acceptsnecessary accept“By accepting credit cards, payments areautomatically deposited into my account,that way I don’t have to make a trip tothe bank.”34%Currently accept cardsStarted in thelast 12 months47% of businesses with revenue 500K currently accept cards²34% of those who accept cardsstarted in the last 12 months³72%Currently accept cards72% of businesses with revenue of 500K–1M currently accept cards²As card acceptance increases,so does card usage. For the periodending 3Q16, Visa sales volumeincreased by 12.1% compared to 11.0%in 2Q16 driven by more transactionsand higher average ticket.32%Started in thelast 12 months¹ Why have you started accepting credit/debit cards?² Please indicate which payment methods yourcompany accepts for purchases and paymentsfrom customers.³ Which payment methods have you started acceptingin the past 12 months?32% of those who accept cardsstarted in the last 12 months.³ Previous Next

16/3Q16Vis

Card acceptance Business size seems to be related to card acceptance. According to responses, businesses with 500K are adopting card acceptance faster than those with 500K– 1M in revenue. Read more Adjusting