Payment friction is a cost that never shows up on a profit and loss statement, but it can have a significant impact on small businesses. A recent survey of 1,000 U.S. consumers and 210 small business operators found that 55% of consumers would stop or seriously reconsider shopping at a local business after one bad payment experience.

The Cost of Inflexible Payment Experiences

The cost of an inflexible payment experience can start with specific moments, such as a wallet left at home or a card that gets declined for no reason. In fact, 1 in 5 digital wallet users now leaves home without a physical wallet, relying entirely on their phone to pay. When a business can’t take it, there is no backup plan.

Consumers are starting to sense when a checkout experience is going to be a problem before it becomes one. The survey found that 37% have already decided against completing a purchase at a local business because paying felt too inconvenient or confusing. Most smiled, walked out, and found somewhere easier to shop. The owner never knew what happened.

The Impact on Small Businesses

While customers are deciding not to come back, operators are absorbing a different version of the same cost, and it’s a cost they don’t see coming. Ask an independent retailer or business owner about their payment processor, and most will tell you it’s fine. Nearly 88% say their tools fit their business well.

However, the friction shows up where they aren’t looking for it. Fifty-two percent spend at least an hour a week on payment administration, reviewing statements, reconciling transactions, and chasing down disputes. That’s time that doesn’t go toward customers or growth. One-third of business operators also said the one thing that would make them switch processors is simply being able to read their bill clearly, ranking fee transparency ahead of better features, faster funding, and improved hardware.

Original reporting: KEYT (Ventura/Santa Barbara) — read the source article.