Friday, July 7, 2023
Alfredo Ortiz, president and CEO of Job Creators Network, maintained that ongoing inflation has placed undue pressures on seniors and individuals living on fixed incomes.
"Inflation remains stubbornly high, punishing ordinary Americans and small businesses,” he said in a statement. “The prices of goods and services are rising at about twice the Federal Reserve's target rate. While the inflation rate is coming down, it's important to remember that inflation compounds and is still escalating from a much higher base.”
J.D. Power’s Banking and Payments Intelligence Report, authored by Jennifer White, senior director of banking and payments intelligence at J.D. Power. surveyed 4,000 retail bank customers in May 2023, finding increased interest in BNPL as a budgetary management tool.
“As customers try to manage their financial situations, BNPL programs have piqued their interest as an option to alleviate their stress,” researchers wrote. “Overall, 80% of customers say they are aware of BNPL products, and many are utilizing these options. More than one-third (34%) say they have used a BNPL program in the past 90 days.”
Researchers suggested consumers are becoming more receptive to alternative loan programs, including those with negative attitudes about extended lines of credit and BNPL in general. Even customers who are theoretically opposed to BNPL are exploring these options, they noted.
For more information on the J.D. Power study, visit www.jdpower.com/business/resources/growing-weary-financial-challenges-bank-customers-reluctantly-turn-buy-now-pay
The Q2 2023 Small Business Index, published in June 2023 by MetLife and the U.S. Chamber of Commerce, surveyed approximately 750 small businesses in May 2023 to assess attitudes about the current economy. Inflation was a top challenge for 54 percent of respondents, followed by rising interest rates among 23 percent, supply chain issues for 23 percent and revenue for 20 percent, stated Cynthia Smith, senior vice president, Regional Business at MetLife.
“The percentages of small business owners expecting an increase in revenues and hiring this quarter represent record highs in the six-year history of the Index, which is a very promising sign,” she said. “While the current economic conditions may have stalled their plans to grow, the combination of small business owners’ determination, drive and positive outlook bodes well for the future.”
Smith additionally noted that small businesses are turning to alternative sources for capital compared to a year ago, particularly personal savings, friends, and family. In fact, 50 percent of small business respondents reported they have delayed business growth plans due to higher interest rates. Another 49 percent, she added, have taken out a business loan within the past year to cover higher costs due to inflation.
Stephanie Sims, founder of Finance-Ability and member of U.S. Chamber of Commerce Small Business Council, observed that restricted access to credit and private equity has also been a problem for SMBs, stating, “Rising interest rates make it more challenging for some entrepreneurs to qualify for financing, although I have seen several loan guarantee programs step up and assist some of these borrowers in securing funding.”
Additional information on the Small Business Index is available at www.uschamber.com/sbindex/summary
Paysafe researchers noted that consumers have not fully curtailed their discretionary spending but are streamlining budgets and switching to payment methods that enable them to control and monitor funds. Lost in Transaction: Consumer Payment Trends 2023 - How consumers’ shifting priorities are impacting the experience economy, published in June 2023, was based on an April 2023 survey of 14,500 consumers in the United States, United Kingdom, Canada, Germany, Austria, Italy, Bulgaria, Mexico, Colombia, Argentina, Peru, Ecuador, Chile, and Brazil.
“Two-thirds of respondents (67%) told us they're more likely to make purchases during Black Friday and other seasonal sales or discounting events, where they have a greater chance of getting a better deal,” Paysafe researchers wrote. “Customers are also more mindful of whether they should shop at all. 61% are more likely to repair an item than replace it with a new one, while 47% report having had second thoughts and abandoning their carts due to budget constraints.”
Researchers suggest these findings indicate that compelling promotions will motivate customers to buy, which makes streamlining checkouts more important than ever before. Consumers were comfortable abandoning shopping carts before the cost-of-living crisis hit, they stated, and cost-of-living pressures and surprise shipping fees will only increase the potential for incomplete checkouts going forward.
To download the Paysafe report, visit www.paysafe.com/en/lost-in-transaction-2023-download/
The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.
