A new report by PayPal Canada, Business of Change: PayPal Canada Small Business Study, shows how dramatically the pandemic has accelerated digital commerce for Canadian small businesses.
Findings revealed that two in three small businesses (67%) accept payments online and half (47%) of them only started doing so this year. Of all small businesses selling online, one-third (34%) turned to digital payments only after Covid-19 was declared a global pandemic in March.
Canadian businesses have lagged behind their U.S. and global counterparts in embracing digital commerce in previous years, PayPal said in a release, “but this study revealed a positive shift. The number of Canadian small businesses selling online spiked nearly 400% in the last five years with the global pandemic being a major catalyst for merchants going digital.”
The majority of online small business owners (72%) believe e-commerce is now necessary in order to have a successful business. In fact, 69% of online small business owners said selling online has made them more successful.
“The shift in small businesses embracing digital tools, technologies and sales channels has been phenomenal.” said Nicole Watts, head of government relations for PayPal Canada. “This year, we’ve seen more movement on Canada becoming a digital economy than in the last five years.”
“Digital commerce is no longer a luxury, it’s a necessity to survive given our new norm and changing consumer behaviour. In addition to these survey results, at PayPal, we have witnessed a three-fold increase in businesses across Canada signing up for our products and services.”
Being online was a matter of survival for Canadian entrepreneurs. Without the ability to sell online, 58% of small business owners said they do not think their business could survive the impact of Covid-19.
“While being online has certainly made running a business during a pandemic easier, the coronavirus has nonetheless had a deep impact on the bottom line,” PayPal said. “More than half of small businesses have been negatively impacted by the pandemic (55%) and one in four business owners say they are not confident they can sustain themselves over the next six months (26%).”
However, there were also some positive outcomes for entrepreneurs who proved to be resilient and innovative, PayPal said: “The vast majority of small businesses (84%) are doing some type of preparation for future waves of Covid-19 and 64% say the pandemic has motivated them to consider new ways to grow their business.”
Other survey highlights include:
- 59% of small businesses say preventing fraud is a challenge of selling online
- Reaching customers in the U.S. was seen as a top five benefit of e-commerce
- 53% say they are hopeful that the holiday season will make up for some of the losses their business has faced earlier this year
- Compared to all Canadian small businesses, those that are online only tend to be owned by women (53%), millennials (47%) and from the BIPOC community (45%)
- Compared to all Canadian small businesses, offline businesses have a greater proportion of boomers (26%) and a lower representation of BIPOC ownership (31%).
This survey was conducted by Edelman in partnership with Logit Group on behalf of PayPal between Sept. 23 and Oct. 6 among a sample of 1,001 small business owners with less than 100 employees.