Visa’s Business Outlook Study Shows Permanent Digital-First Pivot

Visa App

The pandemic fueled the necessity for both businesses and households to quickly adopt a digital-first way of managing just about every aspect of their lives, from school and work, to banking, paying bills, shopping, entertainment and more.

Digital became the new normal, with small to medium-sized businesses (SMBs) leveraging technology to survive during uncertain times. As the world slowly turns the corner toward an unpredictable post-pandemic future, a digital way of life is firmly rooted in the future.

To help SMBs stay afloat during the pandemic and beyond, Visa in 2020 earmarked over $200 million from the Visa Foundation, to help companies worldwide gain a foothold in the digital economy and easily accept digital payments.

The newly released “Visa Back to Business Study: A Global Pulse on Payment Preferences” shows that 68% of respondents said the global pandemic has permanently changed the way they handle payments

“With a 19-month view into the pandemic, we’ve seen that small businesses that embraced digital commerce and cross-border sales have weathered the pandemic better,” Mary Kay Bowman, global head of buyer, seller, core and platform products at Visa, said in a press release about the study that was emailed to PYMNTS.

See also: Visa’s Kevin Phalen: Global SMBs Get Back to Business, Optimistic About the Future

Bowman added that it’s now gone beyond SMBs adapting and staying afloat, and has moved into a “new breed” of entrepreneurs going digital for the first time, right out of the gate. She said Visa helped 16 million SMBs go digital, and the company has a multi-year goal of digitizing 50 million new businesses around the globe.

This fifth edition of Visa’s outlook study turns the spotlight on the economic advantages that come from bridging SMBs, technology and the general public. The study shows that consumers are concerned about touching cash or any payment terminals, with more than two in five shoppers indicating that they wouldn’t go to a store that didn’t have a contactless way to pay.

Read more: Visa, Mastercard Earnings to Anticipate Credit Rebound and Contactless Surge

Some 74% of SMBs worldwide indicated that they expect that trend to become a mainstay. About 40% of SMBs without contactless payment options, such as tap and go, indicated that investing in that technology is a priority to meet shoppers’ expectations.

Last year, 17% of SMBs made the move to eCommerce for the first time, while this year, 57% of respondents anticipated continuing online sales in the next three months.

There are obstacles, however, with 33% of SMBs pointing to data privacy and security concerns, 31% citing expenses related to digital infrastructure and 30% fearing a loss of personal connection to their customers, according to the study.

You may also like: Visa, Mashreq Team on UAE SMB Onboarding

While 54% of respondents said the pandemic posed challenges, 46% indicated that it proved to be a gateway to opportunities, up from 38% in November 2020. Last year, 37% of SMBs that viewed the time as an opportunity said their focus was on introducing new products. Some 34% were looking to build out their sales channels, while 23% scrapped their old businesses and launched something new.

This new edition of the outlook study was conducted by Wakefield Research in June, among 2,250 small business owners at companies with 100 employees or fewer in the U.S., Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore and the United Arab Emirates.

The consumer portion of the study surveyed 1,000 adults ages 18 and over in the U.S., and 500 in Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore and the United Arab Emirates.

Visa said that 3.4 million new business applications were submitted between January and July of this year, and the global financial services company is committed to helping them “embrace the digital future.” Since the onset of the pandemic, Visa said it has launched global community programs “from Dubai to DC” to help SMBs digitize their payments processes.


45% of Non-Recurring Transactions Now Use Instant Payments

clock, calendar

The gig economy and gaming industries have driven a rise in ad hoc transactions, payments made outside of regular invoicing and payroll. Businesses are relying on instant payments to streamline these transactions, which involve contractors, consumers and small businesses.

According to a PYMNTS Intelligence report, “Gigs and Games: How Instant Payments Are Gaining Ground for Ad Hoc Transactions,” a collaboration with Ingo Payments, with increased demand for efficiency and speed, instant payment systems are becoming a preferred solution, though obstacles to wider adoption remain.

Instant Payments Comprise Nearly Half of Ad Hoc Transactions

Instant payments are gaining in popularity for ad hoc transactions, according to the report. With the demand for quicker and more efficient methods of payment, businesses are adopting real-time payment systems to facilitate faster transactions, reduce fraud risk and improve overall financial processes.

ad hoc payments blurb

PYMNTS found 45% of all ad hoc payments made in July 2024 were sent via instant methods, a notable increase from 36% earlier in the year. Industries that rely heavily on nonrecurring payments, such as gaming and the gig economy, have seen the most significant uptake.

Larger Enterprises Leading the Shift

Larger companies are leading the adoption of instant payments for ad hoc transactions. Businesses with more than $1 billion in revenue are sending half of their ad hoc payments via instant rails, revealing a preference for speed and efficiency. Smaller companies, however, are lagging in adoption, with those earning between $50 million and $100 million turning to instant methods for just 34% of ad hoc payments. The delay in adoption among smaller enterprises is often linked to the high costs of integrating instant payment systems into their existing processes.

Despite this, the trend toward adopting instant payment methods is gaining momentum across the board. Many large enterprises view instant payments as the future standard for ad hoc transactions, especially in business models that no longer rely on recurring payees, such as contractors or freelance workers. But challenges persist in scaling this technology across industries of all sizes.

Barriers to Broader Instant Payment Adoption

While instant payments offer considerable benefits, particularly in terms of speed, cost savings, and enhanced customer/vendor retention, the report shows businesses face obstacles in fully adopting them. For many enterprises, the cost of integrating real-time payment systems remains the primary barrier. According to the report, 35% of businesses cite integration costs as the biggest obstacle to adopting instant payments for ad hoc transactions.

Additionally, there is a digital divide, with industries like gaming and the gig economy leading the charge in adopting instant payment systems. But two-thirds of small and medium-sized businesses (SMBs), particularly those in industries with less digital momentum, are dealing with the costs and complexities of implementing these systems. Despite these challenges, businesses that do embrace instant payments could gain a competitive edge by securing customer and vendor loyalty, driving down transaction costs, and improving cash flow management.