Weekly Newsletter

07 February 2024

Weekly Newsletter

07 February 2024

Credit and debit card processing drags down SME business satisfaction with merchant services

JD Power annual US Merchant Services Satisfaction Study examines small business customers of merchant services providers customer satisfaction with Shopify ranking highest

Douglas Blakey February 02 2024

The latest JD Power annual US Merchant Services Satisfaction Study is a mixed bag offering a mix of good and bad news. The good news is that most small businesses are optimistic about the future. This should be good for merchant service providers. The bad news? Small business satisfaction with these services varies. Small businesses are much happier with methods like BNPL compared to credit and debit. Some of this is driven by demographics. Younger and newer business owners are likelier to accept different types of payments methods. But there are other challenges that go beyond demographics. These include delays in account finding, cost and fees, and fraud management.

There is intense market competition in the space. With prevalent issues like fraud and security, it’s not something merchant service providers can take lightly says JD Power.

The JD Power 2024 US Merchant Services Satisfaction Study notes that small business financial optimism is correlated with increased sales processed by merchant services providers. There are 94% of merchants that now accept debit or credit cards. Some 88% accept digital wallet and 54% accept Buy Now, Pay Later (BNPL) payment methods. However, scores are lowest among merchants for processing widely accepted payment types such as credit and debit card transactions. They are highest for processing less widely accepted payment types like BNPL.

“We’re seeing an interesting disconnect in the merchant services marketplace. The most frequently processed forms of payment—credit and debit cards—generate the lowest levels of overall satisfaction among small business owners. Less common payment types such as BNPL, pay by bank and gift cards drive higher satisfaction,” said John Cabell, managing director of payments intelligence at JD Power.

JD Power 2024 US Merchant Services Satisfaction Study key findings

Credit and debit reign supreme on usage, but fail to deliver on satisfaction. Overall, 94% of small businesses accept debit or credit card payments. Most merchants have their credit card (81%) and debit card (80%) payments processed by their provider. Despite being the most processed forms of payment, overall merchant services satisfaction scores are lowest across all aspects of the customer experience among small businesses that have credit cards (692 on a 1,000-point scale) and debit cards (694) processed by their provider.

Satisfaction is highest among businesses where BNPL is processed. Slightly more than half (54%) of small businesses accept BNPL. Just 27% of merchants report processing BNPL with a profiled brand. Satisfaction scores are highest (744) among small businesses that do have this payment type processed. Overall merchant services satisfaction rises as businesses process more payment options. This reaches a high score of 793 among the 4% of businesses that cite six different payment types processed.

Study Ranking

Shopify ranks highest in merchant services satisfaction, with a score of 728, on a 1,000 point-scale. Paysafe (725) ranks second and Bank of America (713) ranks third.

The study measures advice and guidance on running your business; cost of processing payments; data security and protection; managing my account; payment processing; and quality of technology.

The brands evaluated are the US merchant services providers with largest market share.

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