Double the COVID pain for SMEs with 20% increase in card transactions

While it’s more convenient for consumers to use digital wallets and contactless transactions, merchants are seeing their card transaction fees increase as well as trying to survive post-lockdown

Covid-19 lockdowns heavily impacted small businesses, especially those which couldn’t trade online. Whilst these merchants have been slowly recovering since the pandemic, increased merchant fees have provided yet another pain point for SMEs.

Since the initial lockdowns in 2020, Smartpay, Australia and New Zealand’s largest independent EFTPOS provider, reports merchants card transactions have jumped 20% compared to pre-lockdown transaction figures in 2019.

This overall increase in these transactions indicates sustained growth driven by lower cash usage and the shift to a cashless society. Cash usage has been decreasing for years but Covid-19 has helped speed up this shift. Card payments rose again in 2021, up 13.1 per cent on 2020; while digital wallets jumped 90 per cent in the same period, with 68 million monthly transactions.

“This transaction data indicates SME merchants have started to rebound after many struggled through the Covid-19 lockdowns in 2021. But the increase in card usage equates to an increase in merchants fees, adding to costs at a time where saving costs is crucial to small to medium sized businesses.”

“Depending on the merchant’s service provider, small businesses have the opportunity to offset these transaction fees and shield themselves from this increase, allowing them to reinvest back into their business,” says Marty Pomeroy, Chief Executive Officer at Smartpay. 

Marty Pomeroy, shares some business tips that SME merchants could invest their card transaction fee savings in, to maximise their business for 2022. 

1. Stabilise Cash Flow: For any business struggling after Covid-19 lockdowns, using savings to cover running costs and stabilise cash flow would be a high priority. Steering a business back to regular trading whilst improving cash flows is a great position to be in when planning for next year.

2. Negotiate with your Suppliers: You should review your suppliers or seek alternatives from your current suppliers to get a better deal. Making the switch to new suppliers can help your business save and investing these savings to cover any financial gaps can prove beneficial long-term.  You should do this for your business EFTPOS as well.

3. Marketing & Loyalty: Investing in advertising and marketing can have an exponential effect on business. Even small amounts can be invested into online and social advertising, or marketing campaigns – there are often simple (or free) CRM tools businesses could use.  Savings could also be invested into new, financially viable rewards with new redemption rules to ensure loyal customers keep coming back. 

4. Recruitment: Savings could go into hiring new staff, increasing hours or investing in training courses; ways in which businesses can stay ahead of the curve and continue to deliver high levels of service over the busy summer trading period.

Smartpay helps their merchants save or eliminate these fees with savvy retailers using these savings to invest in their business and manage cash flow into the new year.