CardFlight Small Business Report

June 24, 2020

Overall sales remain steady week-over-week and are now up 20% over the pre-COVID baseline.

Introduction

Last week, small business performance overall held steady for the second week in a row. The data in our portfolio indicate that small businesses have held gains made toward the end of May. Week-over-week performance in June is roughly consistent with year-over-year seasonality and most of the metrics we track in this report have returned to or now exceed baseline levels.

Sales volumes declined by just 1.1% last week, while transaction counts increased by 2.6%. Both sales and transactions remain above the baseline, 18.2% and 11.5% respectively. Active merchants continue to grow each week, and are now just 3.3% below the baseline week.

Key takeaways from this week’s report

About this report

The CardFlight Small Business Impact Report is intended to provide insights into the impacts of coronavirus/COVID-19 on small businesses across the United States. The report has been featured in and/or cited by The Atlantic, Bloomberg TV, Business Insider, Digital Transactions, PaymentsJournal, PaymentsSource, and others.

Learn more about the report and our methodology.

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Week-over-week changes

First, we examine how coronavirus/COVID-19 is affecting small business sales by analyzing change in overall sales, number of transactions per business, and more.

Sales at small business 18% above the baseline

Week-over-week sales at the small businesses in our sample were relatively unchanged for the second week in a row— down 1.1% over the preceding week. Overall sales remain 18.2% above the pre-COVID baseline week of March 2–8, 2020.


Transaction counts up 2.6% last week

The total number of transactions in our sample were up by 2.6% over the previous week. The number of transactions the small businesses in our sample processed last week are above the pre-COVID baseline by more than 11%.

Number of active small businesses stable week-over-week

The number of active small businesses (measured as all businesses who processed at least one transaction in the previous week) in our sample grew by 0.6% from June 15–21 compared to the preceding week. The number of active merchants is now just 3.3% below the pre-COVID baseline.

The average number of transactions per active merchant was up 2% last week. This metric is now more than 15% above the pre-COVID baseline week of March 2–8, 2020.

Card-present payments vs. card-not-present

The payments industry has two broad categories for transactions based on where they occur.

  • Card-present payments are those that are initiated in-person (face-to-face). This includes all instances in which a credit or debit card is physically swiped, inserted, or tapped at a merchant location.
  • Card-not-present payments are those made over the phone or online. This category of payments also includes invoices and those merchants who save cards of their frequent customers on file.

At the onset of the coronavirus/COVID-19 pandemic, card-present sales decreased at a faster rate than card-not-present sales. That trend ended around the week of April 6–12, when card-present sales began to slowly gain ground week-over-week, ending the week of June 15–21 up more than 4% over the baseline week.

Changing behavior as seen through contactless tap to pay

Next, we'll examine how coronavirus/COVID-19 is changing the manner by which consumers pay for their goods in-person. The three ways US consumers typically use credit and debit cards for in-person transactions are:

  • Dipping an EMV chip card
  • Tapping a contactless card or smart phone
  • Swiping via magnetic stripe

Since magnetic stripe payments are a relatively low proportion of our payment volume, we're focusing on chip cards and contactless tap. We continue to see that overall, growth in sales made via contactless payment methods are outpacing those made via EMV chip.

While payments made via EMV chip are now up nearly 3% over their pre-COVID baseline levels, contactless payment methods are up by nearly 75%.

For more about the changing role of contactless in the payments ecosystem, view our recent webinar we hosted in partnership with PAX Technology.

Deep dive: Sales by business category

In this section of the CardFlight Small Business Impact Report, we take a closer look at small business performance by business category.

  • Food and drink establishments: Includes bars and restaurants
  • Service providers: General contractors, healthcare providers, providers of professional services, and others
  • Retail: Businesses like sporting goods stores, specialty retail, home furnishings, and automotive

Sales at food and drink businesses up 22% over baseline

Sales at food and drink businesses were up 7.9% last week, and are now nearly 22% above the pre-COVID baseline of March 2–8, 2020. Meanwhile, transaction counts grew by 3.9% week-over-week, and remain up by more than 33% for the second week in a row.

Retail sales 17% above pre-COVID baseline week

Sales at the retail businesses in our sample were essentially unchanged last week, up 0.6% compared to the preceding week. Last week's retail sales performance means this category maintains its increase over the baseline week; sales are now up nearly 17% compared to the baseline week of March 2–8, 2020. Over the past three weeks, sales in this category have proven to be the most steady of the three categories we track in this report.

Transaction counts in the retail category increased by 4.8% week-over-week, and are now just 4.3% below the baseline.

Sales at services businesses steady week-over-week

Businesses in the services category were down 2.4% last week, but remain 12.6% above the baseline.

Transaction counts in the services category increased by 2.4% week-over-week, and are now nearly 2% above the baseline week.

Business outlook

In this section of the Small Business Impact Report, we take a closer look at changes within different industries and business categories.

Businesses with the biggest sales gains last week

While small business sales didn’t increase this week, some businesses did experience weekly gains, including:

  • Clothing and apparel: Last week's sales grew 23.1%; now 34.2% below the baseline
  • Organizations including education, religious and nonprofits: Sales were up 17% last week; now 51.1% below baseline
  • Home furnishings: Sales up 15.8%; now 6.5% below baseline

Businesses with the biggest rebound from their low point

  • Healthcare: Last week’s sales were 176.2% above the low (April 6–12); now 13% above baseline
  • Food and drink: Sales 93% above the low (March 23–29); now 21.9% above baseline
  • Automotive retail: Sales 70.5% above the low (April 6–12); now 8.7% above baseline
  • On-site technical services: Sales 69% above the low (April 6–12); now 37.1% above baseline

A note about the businesses in our sample

Given the nature of small businesses as whole, at any time, there is a fair amount of new business formation and closures. The analysis below is our attempt to separate net changes in small-business activity from any pandemic-related market share shifts towards SwipeSimple.

Learn more about the SwipeSimple portfolio and our methodology for this section.

For the data tables on which the charts above were made, view the spreadsheet.

Thanks for reading the CardFlight Small Business Impact Report

Do you have questions, feedback, or press inquiries? Contact us. You may also view past editions of the CardFlight Small Business Impact Report.

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About the report

The CardFlight Small Business Impact Report is intended to provide insights into the impacts of coronavirus/COVID-19 on small businesses across the United States. The report and the data within have been featured in The Atlantic, Bloomberg TV, Business Insider, Digital Transactions, PaymentsJournal, PaymentsSource, and others.

Methodology

The report is based on analysis of a representative sample of more than two million transactions processed by more than 60,000 small businesses who use CardFlight’s SwipeSimple software to accept credit and debit card payments.

To create this report, we analyzed a representative sample of millions of transactions processed from March 2 – June 21, 2020, by:

  • more than 60,000 small businesses 
  • in all 50 states 
  • using CardFlight’s SwipeSimple software to accept credit and debit card payments

This report can be useful in understanding the impact of COVID-19 on small businesses at a hyper-local perspective and across the US. For up-to-date data regarding shifts in consumer spending among local businesses, impacts across different industries, and across cities and states, access the most recent report.

The SwipeSimple small business owner 

The typical SwipeSimple merchant has one to ten employees and less than five locations or mobile service points. The average active merchant represented in this data set processes approximately $130,000 in credit/debit card payments annually. The merchants are a mix of professional and personal service providers, specialty retail establishments, and food and drink purveyors.

The SwipeSimple portfolio

Given the nature of small businesses as whole, at any time, there is a fair amount of new business formation and closures. The analysis below is our attempt to separate net changes in small-business activity from any pandemic-related market share shifts towards SwipeSimple.

Due to the versatility of our product offering, these shifts occurred by existing small businesses adding SwipeSimple to their payment environment in order to quickly adapt to new service and delivery methods.

To better assess the representative nature of the metrics in our sample, we compared our business activity from March through June 2020 with the same period in 2019, and used the 2019 period as a baseline for the typical contribution towards total small business sales of newly processing merchants. We used this to create an adjusted business formation estimate that attempts to remove bias from any pandemic-related market share gains.

While we will continue to report based upon the SwipeSimple portfolio, we added additional analysis to compare the actual SwipeSimple portfolio with our projection for all small businesses.

The charts above reflect our projection for how small businesses have performed according to the baseline week, based on:

  • SwipeSimple portfolio: Reflects all transactions processed by US small businesses using SwipeSimple for a given week. This is the same methodology for all other charts in this report.
  • Same-store sales: Reflects all transactions processed by US small businesses using SwipeSimple for a given week, only including merchants that were active prior to March 9, 2020.
  • Projection for all small businesses: Reflects actual transactions from merchants in the same-store sales group, plus an imputed amount of transactions from new merchants at the lower 2019 growth levels, to remove the impact of share shift during 2020 due to pandemic-related reasons.