Education and collaboration are vital to improving payment experiences for small businesses in Canada

In November, I had the pleasure of speaking at the first-ever in-person The SUMMIT Series event in Montreal, Quebec. With colleagues from Fintech Cadence, ORCHID B, Desjardins and Xero, the discussion focused on how payments can best meet the needs of small businesses in Canada. After hearing perspectives from each industry expert, one thing became absolutely clear: we need more education and collaboration within the financial sector so that small businesses not only survive — but thrive. 

As an economic engine for local communities and the national economy, small businesses are of critical importance to a financially resilient Canada. According to Statistics Canada, of over one million employer businesses in Canada, 98 per cent represent small businesses. Improving the payment experiences for this traditionally underserved market is crucial to ensuring Canada remains financially resilient and our economy remains globally competitive.

Over several years, we have seen a continued shift toward digital payments in Canada and the pandemic accelerated this shift. As Canadians continue to rethink how and where they make purchases, we’re seeing businesses transform by investing in e-commerce sales platforms and accepting more digital and contactless payments to cater to changing customer preferences. According to research from Payments Canada, more businesses, 14 per cent in 2021 compared to 11 per cent in 2020, built an e-commerce presence or explored ways to make the online purchase experience easier and more seamless. 

While the pandemic showed us how quickly small businesses can adapt to change, it also showed us the payment-related pain points that they experience every day. Some of which include managing business cash flow and payment processing delays. Easy access to funding﹘something that is essential for small businesses to survive. This type of funding, being accessible and available quickly, could be the difference between a company staying in business or not. 

Modern payment options such as real-time payments can help with this by introducing more control, convenience and speed to the payment experience. Yet, surprisingly, our recent research showed that only 22 per cent of small businesses believe that payment innovation will be key to supporting their business, compared to 38 per cent of large businesses and 47 per cent of commercial businesses. 

If small businesses don’t know about the benefits that modern payment options offer, they are unlikely to adopt modern payment options, risking their ability to attract and gain new customers, and potentially, missing out on business growth opportunities. But small businesses shouldn’t be alone in trying to get there. The payment community has an opportunity to educate and connect with the small business community so that more small businesses know about the benefits of modern payment options. 

One of the ways that we do this at Payments Canada is by regularly conducting research and sharing the findings on our website. For example, every year, we release our annual Canadian Payment Methods and Trends report that analyzes the billions of payment transactions that Canadian consumers and businesses make each year. Throughout the year, we also conduct timely and relevant market research and offer regular touchpoints for the payment community and the small business community to connect and discuss the trends and topics central to the evolution of payments in Canada.

The future is bright for small businesses in Canada, but there is work to be done. There is no evolution of payments in Canada without our small businesses. Knowing and promoting the payment attitudes and behaviours of consumers and businesses is crucial to help inform our strategies but industry collaboration and education is key. I look forward to continuing this discussion next year at The Payments Canada SUMMIT taking place from May 3-5 in Toronto. 

I hope to see you there,

Stephen Yun
Senior Analyst, Market Insights 
Payments Canada