Retail's Next Move: Inside the Payment Strategies Driving US Small Business Success

Small American retailers are under mounting pressure to match the service levels provided by larger brands, especially when it comes to payments. Consumers now want the same seamless checkout experience — and variety of payment options — regardless of whether they’re buying from a national chain store or a local independent.

Small businesses are upgrading their payment systems to meet these demands. From contactless capabilities to next-gen point of sale (POS) systems, the race is on to implement technology that streamlines operations, boosts cash flow, and keeps customers returning.

Paysafe's recent research reveals how U.S. retailers and other small and mid-sized businesses (SMBs) are transforming their payment strategies to drive growth. The findings show clear paths forward for retail businesses ready to modernize.

Putting Payments First

Small retailers understand that the payment experience directly impacts customer satisfaction and business success. Eight-nine percent of small retailers consider providing customers with a great payment experience as business-critical.

When asked what it takes to deliver a superior payment experience, one factor stood out for 53 percent of retailers: payment choice. With their operations increasingly spanning both physical and online sales channels, retailers realize they must keep pace with digital payment methods while maintaining traditional in-person options like cash.

Catering to Contactless

Enabling mobile and contactless payments is a top priority for small retailers, with 61 percent planning to enhance their contactless payment capabilities over the next 12 months.

The growing use of digital wallets has likely contributed to the widespread shift toward contactless. More consumers now expect to pay with their smartphone or smartwatch, with some preferring not to carry physical cards or cash.

Furthermore, contactless payments offer operational advantages beyond customer convenience. Transactions are faster without the need to handle cash or swipe cards, and lines move more quickly.

Speed improvements translate directly into revenue gains. Faster checkout reduces wait times, improves customer satisfaction, and means retailers can process more transactions without adding staff or expanding physical checkout areas.

Seizing the E-Commerce Opportunity

Online sales remain a growth area for small businesses that tend to trail larger competitors in e-commerce readiness. This year, small retailers appear to be closing the gap, with 90 percent planning to start or expand online sales over the next 12 months.

For independent retailers, selling online is primarily about reaching more customers, with 60 percent citing this as their main reason for expanding into e-commerce. For businesses that want to attract shoppers outside of their immediate community, e-commerce is a key enabler.

Yet online success requires optimizing digital checkout processes with the same attention given to in-store payments. Customers expect smooth, secure online transactions that match or exceed their in-person experiences.

For instance, payment variety matters as much online as in physical stores. Often, consumers have strong preferences for specific online payment methods. According to recent Paysafe consumer research, 43 percent will abandon their online shopping cart if their payment method of choice isn’t available.

Embedded payments are another consideration for retailers aiming to create seamless checkout experiences. Embedded gateways allow customers to complete transactions directly on a business’s website without being redirected to a third-party payment platform, reducing friction.

Security is also paramount. Paysafe’s research found that 78 percent of retailers are concerned about payment security, and 42 percent have been negatively affected by fraud within the past year. To stay ahead of fraudsters, retailers must work with their payment provider to balance frictionless payments with robust security measures.

Winning in Retail Starts With Payments

Payment innovation is central to delivering a smooth customer experience, building loyalty, and strengthening sales performance.

As consumers demand fast, flexible, and secure ways to pay, small businesses are stepping up. Whether embracing mobile and contactless technology, launching into e-commerce, or offering a wider range of payment options, independent retailers are closing the gap with larger competitors.

As Paysafe’s chief product officer, Bob Legters leads product strategy and monetization for consumer products globally.