Small Businesses Don’t Want to Pay Credit Card Fees

Small Businesses Don’t Want to Pay Credit Card Fees

The survey was held among U.S. small businesses with annual sales of $500,000 to $10 million.

In spring 2018, Mercator Advisory Group fielded its third annual web-based survey of U.S. small businesses (between $500,000 and $10 million annual sales) regarding payment acceptance, business-to-business (B2B) payments and use of banking services and alternative lenders.

Business Credit Cards and B2B Payments: Opportunity to Improve Market Penetration is the second of three reports summarizing the results of the 2018 Small Business Payments and Banking Survey.

According to the report, today small businesses use business credit cards less than in previous years (61% in 2018, down from 71% in 2017 and 69% in 2016).

More than 2 in 5 U.S. small businesses report that cash flow management is a concern to their day-to-day operations. Half of small businesses who use business credit cards tend to borrow on them, including 1 in 4 who regularly do so.

Cash flow concerns cause small businesses to use credit lines wherever they can, seeking more generous credit lines from business credit cards and loans from banks, non-banks, and alternative lenders.

More firms consider important features of a credit card to be no annual fee (79%), good customer service (78%), and a generous credit line (usually over $10,000) (77%) than consider rewards important (75%), rewards being a feature that most business credit cards do offer. A competitive APR rate (74%) is also important to small firms, for whom borrowing on credit is common. Among the rewards offered, cash back is important to more firms than are airline travel rewards or merchandise rewards:

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