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  • Writer's pictureRoy Urrico

Steadying Consumer Spending and Biometric POS Spending Help Business Market

By Roy Urrico 

Finopotamus aims to highlight white papers, surveys, analyses and reports that provide a glimpse as to what is taking place and/or impacting credit unions and other organizations in the financial services industry.


A pair of reports highlighting business:


Fiserv Small Business Index


Brookfield, Wis. based Fiserv, Inc., a provider of payments and financial services technology, published the Fiserv Small Business Index for January 2024. The Index is an indicator of the performance of small businesses in the U.S. at national, state, and industry levels.


According to the report, spending at small businesses held steady to start the year, growing .1% month-over-month to remain at an index of 138, unchanged from December. Year-over-year sales reflected healthy consumer demand, growing 1.7%, but off the pace of the 2.6% increase in December 2023.


“Small businesses maintained steady sales in January despite harsh weather conditions impacting much of the country,” said Prasanna Dhore, chief data officer at Fiserv. “Small businesses in the retail sector outperformed the small business category overall, with growth driven by consumer spending on building materials, health and personal care, and general merchandise. Spending in the food services subsector, which includes restaurants and bars, slipped as we moved out of the holiday season.”


The January index for retail represented a one-point gain over December, with retail sector small businesses outperforming the small business category overall. This equated to plus .7% month-over-month sales growth and plus 1.9% year-over-year growth. Foot traffic across retail was up 4.2% year-over-year, signaling consumer demand for goods has continued to expand post-holiday. Building materials, health and personal care and general merchandise led the growth. Areas that typically represent higher discretionary spending did not keep pace, namely clothing and sporting goods.


Food services and drinking places saw demand slip compared to the holiday season. The January index for this subsector fell five points from December, to 122. Month-over-month sales were down 4.1%, and year-over-year sales were down 1.9%.


Specialty trade contractors had a January index of 145, marking a 1-point decline from December. Month-over-month sales were slightly down at 0.5%, while the subsector grew modestly at 0.9% compared to January 2023. The specialty trade contractors subsector includes service providers, such as carpentry and masonry, roofing, electrical, and heating and plumbing specialists.


Professional, scientific, and technical services increased one point over December to an index of 148 in January. Small business sales in this subsector grew at .7% compared to December and were up significantly compared to January 2023, growing 6%. This broad subsector includes veterinary, legal, accounting, advertising, tax preparation and other professional services.


Juniper Biometric In-store Payments Research


A new study by Hampshire, UK-based Juniper Research forecasts a substantial growth of 138% in the number of transactions carried out via biometric-enabled point of sale (POS) terminals, up from 19.5 billion in 2023 to about $2.7 billion. Biometric in-store payments enable consumers to pay in-store through different biometrics, including palm vein, facial and iris recognition, and fingerprints.


The research found that in-store biometrics can enable a better consumer experience; allowing retailers to create a highly differentiated in-store offering. This differentiation is key for the under-pressure in-store retail sector, which faces stronger than ever competition from eCommerce, alongside reduced consumer spending, due to the cost-of-living crisis in many markets.


The report emphasized the importance of biometrics when it comes to improving consumer experience in brick-and-mortar retail. As retailers compete more fiercely for customers, providing a strong in-store experience is vital for success.


Research co-author Melissa Amouny commented: “The physical nature of bricks-and-mortar stores is one of its only remaining competitive edges, therefore stores must implement convenient payment methods like biometrics to maximize this. These changes will make retail stores more distinctive destinations for shoppers, boosting their resilience.”


The research found that while biometric payment systems have high initial costs, they can deliver a return on investment in the longer term by further automating checkout processes.


While retailers are reluctant to invest at a time of strict budgetary controls, the report noted that they must prioritize investments in biometric in-store payments now to ensure they do not get left behind by more agile competitors.


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