63% of SMBs See Cards as Their Best Refund Protection

§ 01 Executive Snapshot

• What: A report reveals that 63% of SMBs find cards to be the best option for refund protection.
• Who: Small and medium-sized business owners and executives, Mastercard, PYMNTS Intelligence.
• Why it matters: The findings highlight a significant shift in payment preferences among SMBs, indicating an opportunity for banks and payments providers to address the practical needs driving cash reliance.

§ 02 Key Developments

• 45% of SMBs express a strong interest in reducing cash reliance, particularly those in cash-intensive sectors like construction.
• 68% of Gen Z business owners want to decrease their dependence on cash, despite currently processing over half of their payments in cash.
• 63% of SMBs believe that cards are the most effective way to dispute payments and obtain refunds.

§ 03 Strategic Context

• The transition from cash to digital payments among SMBs is influenced by practical operational needs, with many businesses still deeply integrated with cash transactions.
• The evolving landscape of payment tools presents a critical moment for banks and payment providers to innovate solutions that meet the specific needs of SMBs.

§ 04 Strategic Implications

• The immediate consequence for payment providers is the need to develop card products that emphasize control, visibility, and cash flow management to attract SMBs.
• Long-term, the shift towards digital payments could reshape SMB operations, creating opportunities for enhanced financial tools that blend traditional cash benefits with modern efficiencies.

§ 05 Risks & Constraints

• A potential risk lies in the varied access to business credit cards among different segments of SMBs, which could hinder widespread adoption of digital payment solutions.
• Providers may face challenges in meeting the support needs of cash-reliant and rural businesses that prefer human assistance over digital solutions.

§ 06 Watchlist / Forward Signals

• Future developments to watch include the rollout of business credit cards with enhanced digital tools and adaptive payment options tailored for SMBs.
• Monitoring shifts in Gen Z business payment preferences will indicate broader trends in the adoption of cash alternatives among younger entrepreneurs.