PayPal Study Reveals Less Than One in Five Canadian SMBs Accepts Online Payments
May 09 2017 - 6:00AM
Business Wire
Canadian small businesses that accept online
payments reported higher average revenue compared to small
businesses without digital payment solutions.
Canadian small and medium-sized businesses (SMB) are leaving
money on the table, reveals an in-depth study commissioned by
PayPal Canada. PayPal’s Canadian SMB Landscape Study highlights
that less than only one in five (17%) Canadian small businesses are
using payment tools such as electronic invoicing, an online
marketplace, or an e-commerce enabled website.
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Canadian e-commerce spending is forecasted to reach $42 billion
by 2018 and globally this figure is expected to hit $27 trillion by
2020.1 PayPal’s study indicates that Canadian small businesses are
not harnessing the power of e-commerce to sell where their
customers are shopping – 80 per cent of Canadians shopped online in
20152 – and it shows up on their bottom line. Businesses that
accept online payments as a complement to their offline revenue
stream reported an average revenue of $175,000, which is more than
double businesses that operate without online payment capabilities
($80,000). Businesses that only accept payments online reported an
average revenue of $150,000.
“A thriving e-commerce environment in Canada can lead to greater
trade, employment and income opportunities,” believes Paul Parisi,
President of PayPal Canada. “As a digital payments leader, we at
PayPal, are focused on offering solutions that benefit our 250,000
small business customers across the country and we are actively
collaborating with ecosystem players to help grow Canada’s digital
economy.”
Low e-commerce usage and appetite among Canadian SMBs
A significant majority of Canadian SMBs are not ready to
participate let alone compete in the digital economy. The study
shows that 83 per cent of Canadian SMBs do not accept any form of
online or mobile payment and 71 per cent of this group said they
would never consider selling online.
One of the first steps towards embracing e-commerce is building
an online presence, such as a website. Today, only 7 per cent of
the Canadian SMBs surveyed have a website capable of processing
online payments and 34 per cent of businesses that do not currently
accept online payments have no foreseeable plans to build a website
at all.
What’s holding e-commerce back in Canada?
Canadian SMBs that do not currently sell online report several
concerns that keep them from doing so. Chief among them is concern
about providing the same level of service (30%), followed by online
fraud (21%), limited understanding of technology (19%), and
distribution or delivery issues (19%). Nearly three quarters (72%)
of offline businesses claimed that they are not particularly
sophisticated in terms of technology and e-marketing knowledge.
“Virtually every sector of the economy is rapidly being reshaped
by technology,” said the Honourable Navdeep Bains, Canada’s
Minister of Innovation, Science and Economic Development. “In a
global and digital economy that allows consumers to purchase goods
and services from anywhere in the world, more Canadian businesses
should invest in the development and adoption of new technologies.
That’s how Canadian businesses will remain globally competitive and
create well-paying jobs for the middle class.”
Canadian SMB owners are primarily men above the age of
55
The geographic distribution of Canadian SMB across Canada is
fairly even, according to study findings. The majority (67%) of
Canadian small business owners are men and 63 per cent are 55 years
of age or older. However, these numbers shift dramatically when
looking at e-commerce enabled businesses – 77 per cent of SMB
owners that accept payments through online and offline channels and
66 per cent of businesses that only accept online payments are
under 55 years of age. Multi-channel businesses are the youngest
group, with a median age of 44. There is also a significant under
representation of women SMB owners. Only one third (33%) of
Canadian small businesses are owned by women, and this is
consistent across businesses that sell online and those that do
not.
Complete study findings can be found here.
1 PayPal commissioned study conducted Ipsos, PayPal Cross-border
Consumer Research 20162 Canada Post, Growing E-Commerce in Canada:
Unlocking the Online Shopper Opportunity, 2015
PayPal Canada’s Canadian Landscape Study Methodology
Findings are based on a PayPal-commissioned study which was led,
designed and managed by Barraza & Associates, with execution
and reporting by Northstar Research Partners. This study was
conducted between December 10th, 2015, and January 10th 2016, on
behalf of PayPal. For this survey, a sample of 1,000 Canadian small
business owners were interviewed online. 3% is the margin of error
tested at the 95% confidence level.
About PayPal
Fueled by a fundamental belief that having access to financial
services creates opportunity, PayPal (Nasdaq: PYPL) is committed to
democratizing financial services and empowering people and
businesses to join and thrive in the global economy. Our open
digital payments platform gives PayPal’s 203 million active account
holders the confidence to connect and transact in new and powerful
ways, whether they are online, on a mobile device, in an app, or in
person. Through a combination of technological innovation and
strategic partnerships, PayPal creates better ways to manage and
move money, and offers choice and flexibility when sending
payments, paying or getting paid. Available in more than 200
markets around the world, the PayPal platform, including Braintree,
Venmo and Xoom, enables consumers and merchants to receive money in
more than 100 currencies, withdraw funds in 56 currencies and hold
balances in their PayPal accounts in 25 currencies. For more
information, visit PayPal.ca.
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EdelmanRebecca Myers, 416-849-1507Account
Managerrebecca.myers@edelman.com
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