CardFlight Small Business Report

October 14, 2020

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Introduction

In this expanded edition of the CardFlight Small Business Report, we report on last week's sales data, provide a month-end look back, and examine the rise of touch-free payment methods like contactless tap to pay, invoices, and more.

In this report:

About this report

The CardFlight Small Business Report analyzes sales performance and emerging trends among small businesses in 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. Sign up below to receive future report notifications right in your inbox.

Learn more about the report and our methodology.

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Week-over-week changes

First, we examine change in week-over-week small business performance by analyzing change in overall sales, number of transactions per business, and more.

Sales at small businesses down 5%

Week-over-week sales at the small businesses in our sample fell by 4.9 % compared to the week of September 28 – October 4, 2020.

Source: Transactions processed by US small businesses with SwipeSimple. Percentages provided above reflect total change over the preceding eight weeks, compared to the baseline week of March 2–8, 2020.
For complete week-by-week data, see this spreadsheet
.


Transaction counts down slightly last week

The transaction count metric represents the total number of transactions processed by the small businesses in our sample. Last week, transaction counts decreased by 0.3%.

Source: Transactions processed by US small businesses with SwipeSimple. Percentages provided above reflect total change over the preceding eight weeks, compared to the baseline week of March 2–8, 2020.
For complete week-by-week data, see this spreadsheet
.


Number of active small businesses register a minor decrease

This metric measures all businesses who processed at least one transaction in the preceding week. The number of active merchants decreased by 0.6% last week.

Source: Transactions processed by US small businesses with SwipeSimple. Percentages provided above reflect total change over the preceding eight weeks, compared to the baseline week of March 2–8, 2020.


The average number of transactions per active merchant increased by 0.3% last week.

Source: Transactions processed by US small businesses with SwipeSimple. Percentages provided above reflect total change over the preceding eight weeks, compared to the 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.

Changing behavior as seen through payment method

Source: Transactions processed by US small businesses with SwipeSimple. Percentages provided above reflect total change over the preceding eight weeks, compared to the baseline week of March 2–8, 2020..


Changing behavior as seen through touch-free ways to pay

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

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 22% over their pre-COVID baseline levels, contactless payment methods are up more than 202%.

For more about COVID's effect on low-contact ways to pay, view the special section of this week's expanded report.


Changes in payment methods for in-person transactions

Source: Transactions processed by US small businesses with SwipeSimple. Percentages provided above reflect total change over the preceding eight weeks, compared to the baseline week of March 2–8, 2020..


Sales by business category

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

  • Food and Drink establishments: Includes bars and restaurants
  • Services: 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 down 5%

Sales at Food and Drink businesses decreased by 4.8% last week. Transaction counts decreased by 1.8% week-over-week.

Source: Transactions processed by US small businesses with SwipeSimple. Percentages provided above reflect total change over the preceding eight weeks, compared to the baseline week of March 2–8, 2020. .


Retail sales down 16%

Sales at the Retail businesses in our sample decreased by 15.8% week-over-week. Meanwhile, transaction counts increased by 1.2%.

Retail is the most volatile business category we track in this report. We'll continue to monitor change in sales in this category.

Source: Transactions processed by US small businesses with SwipeSimple. Percentages provided above reflect total change over the preceding eight weeks, compared to the baseline week of March 2–8, 2020. .


Sales at Services businesses down 4%

Sales at businesses in the Services category decreased by 3.9% last week. Meanwhile, transaction counts decreased by 1.4%.

Source: Transactions processed by US small businesses with SwipeSimple. Percentages provided above reflect total change over the preceding eight weeks, compared to the baseline week of March 2–8, 2020..


Month-over-month changes

Next, we take a look at the month-over-month changes to sales, transaction counts, and number of active merchants at US small businesses. This analysis is based on "whole month" comparisons, using March 2020 as the baseline month.

Monthly change in sales

Sales at the small businesses in our sample ended the month of September 5.4% below August.

Source: Transactions processed by US small businesses with SwipeSimple. Chart represents percentage-point month-over-month change compared to the baseline month of March, 2020.


Monthly change in transaction counts

Transaction counts ended the month of August 0.1% below July.

Source: Transactions processed by US small businesses with SwipeSimple. Chart represents percentage-point month-over-month change compared to the baseline month of March, 2020.


Monthly change in active merchants

The number of active small businesses in our sample ended the month of September 1.5% below August.

Source: Transactions processed by US small businesses with SwipeSimple. Chart represents percentage-point month-over-month change compared to the baseline month of March, 2020.


The rise of touch-free payments

In this section of the report, we examine how the COVID-19 global pandemic changed how consumers pay small businesses for their goods and services. Learn more about the ways merchants accept touch-free payments with SwipeSimple.


In-person payments

First, we analyze the way customers of small businesses are changing how they pay for goods and services 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 contactless-enabled phone
  • Swiping via magnetic stripe

The number of in-person transactions made via EMV chip cards are up almost 22% compared to the pre-COVID baseline week of March 2-8, 2020. Magnetic swipe payments are down 9.2%, and contactless tap transactions are up more than 202%.

Source: Transactions processed by US small businesses with SwipeSimple. Chart represents percentage-point month-over-month change compared to the baseline month of March, 2020.


Remote payments

Next, we analyze the way the customers of small businesses are changing how they pay for goods and services when not in-person.

We'll focus on the following ways small businesses accept payments with SwipeSimple:

  • Invoices, which can be sent via email, SMS text message, or secure payment link
  • Keyed entry, frequently used to accept credit card payments over the phone
  • Card on file, which enables small businesses to securely store a customer's credit card for repeat purchases

Transactions made via invoices are up nearly 250% compared to the pre-COVID baseline week of March 2–8, 2020. Keyed entry transaction counts are up nearly 32% and card-on-file transactions are up 124%.

Source: Transactions processed by US small businesses with SwipeSimple. Chart represents percentage-point month-over-month change compared to the baseline month of March, 2020.


Cash payments

Although most small businesses use SwipeSimple to accept credit card payments, a small portion of the transactions we record are cash payments. In this section, we see how COVID-19 affected consumer preference for cash payments.

Payment made via cash decreased significantly throughout the early months of the COVID-19 pandemic but have since rebounded to nearly 16% above the baseline in September.

Source: Transactions processed by US small businesses with SwipeSimple. Chart represents percentage-point month-over-month change compared to the baseline month of March, 2020.


Conclusion

Thanks for reading this expanded edition of the CardFlight Small Business Report. Sign up for report notifications below to stay in the loop as we continue to explore changes in the realms of small business payment technology.

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

Never miss a new report

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About the report

The CardFlight Small Business Report is intended to provide insights into ongoing sales performance, trends, predictions, and unique analysis of US small businesses. The report has 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 65,000 small businesses who use SwipeSimple software (the signature product of CardFlight) to accept credit and debit card payments.

To create this report, we analyzed a representative sample of millions of transactions processed by:

  • in all 50 states 
  • using CardFlight’s SwipeSimple software to accept credit and debit card payments

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.