Eye on Merchants: CardFlight Says Small Business Sales Down; E-Commerce Sales Growth Continues

A decline in transactions at small and mid-size businesses accelerated through March as consumers react to shelter-at-home and social-distancing precautions, according to data from point-of-sale technology provider CardFlight Inc. But their spending shifted to e-commerce in many merchant categories, finds data from Signifyd, a vendor of e-commerce fraud solutions.

Sales at small businesses fell for the third consecutive week in March, New York City-based CardFlight says in its Small Business Impact Report released Wednesday. Sales—based on data from 60,000 small businesses using CardFlight’s SwipeSimple software in all 50 states—shows that sales for the week of March 23-29 were down 12.6% week-over-week and 26.9% from March 2-8, prior to shelter-in-place restrictions.

The total number of transactions fell, too, with 49.8% less volume for the last week of March compared to the first week. Average transaction size, however, has grown. It’s 45.4% greater for the end of March than at the beginning. 

CardFlight’s data also quantifies the number of active merchants, with that count falling 26.1% by the end of March.

But not all merchants are uniformly affected by the Covid-19 prevention efforts. CardFlight says hospitality merchants—food and drink establishments—are the hardest hit, with total sales down 36.9%. Service providers, at 16.6%, and retailer, 18.5%, also experienced decreased sales. Only specialty retailers, at 14.8% more sales, ended the month with an overall increase.

Consumers also altered how they paid. Dipped EMV transaction volume was down 47.6% in the last week of March compared to the first week. Magnetic-stripe payments were down 64.2%, followed by 55% decrease for contactless payments. Only invoicing saw an increase, at a positive 10% for the last week.

In the card-not-present arena, e-commerce sales grew 9% for the week of March 24-30, says San Jose, Calif.-based Signifyd, an online-fraud prevention firm. For the month, e-commerce sales increased 19%.

Its data may indicate that consumers are relaxing their zealous spending in some categories. 

“Products that flew off the digital shelves early in the pandemic have slowed considerably,” Signifyd says in its report. “Groceries, which saw a 110% sales increase in mid-March, were down 25% the week of March 24 to 30. The story was similar for consumer packaged goods, which includes toilet paper and paper towels. And even commodities and collectibles, which includes gold bars and other precious metals, slid 28% week-over-week after two weeks of strong growth.”