The “now normal” is upon us. What is the now normal? It’s life as we are now living it. Social distancing, wearing masks, contactless payments. And small businesses are increasingly turning to digital services to carry them through the now normal.
Mastercard has been putting out some important research about small businesses and how they are surviving the pandemic. It’s most recent survey found that 38% of local businesses say the pandemic has negatively impacted their cash flow, as customers are slower to pay with checks and or cash.
The survey also found that 48% of responding business owners believe they are a missed payment or two away from going out of business.
Times Up for Checks and Cash?
Times are indeed tough. But some small/local business owners are turning the corner too. According to the same Mastercard survey, 64% of respondents said they were turning away from checks and cash and turning to online and digital payment solutions. That is a profound shift.
On a personal note, we’ve used checks or cash for decades to pay people who do work around our home. That was until at the height of the shutdown here in California when we chose to pay the same people even though they were not actually doing any work. So we asked them to accept Venmo and they did. Now that is just how we pay them, plain and simple.
The primary factors driving business owners are speed and security. Though I would submit speed ranks the highest given the edge that so many businesses are teetering on these days. I doubt small business owners and their customers will slip back to paper money or paper checks even if the pandemic magically disappears.
The convenience of digital payments for both parties cannot be understated. Perhaps the only reason business owners would like to go back to cash or checks is the temptation to under-report income for tax purposes.
Fully 73% of survey respondents said that digital payments are the “new normal” and will continue to be going forward. So as the “now normal” comes into closer focus we’d expect local, state, and federal tax collectors to cheer the shift to digital payment solutions, too.