Small business customers are demanding an ever expanding range of payment options, but catering to this demand comes at a cost. How can under-pressure firms find the money to invest in new tech and meet this need, while safeguarding cash flow?

What are the expectations around small business payment options?

Customer expectations around payment methods has never been higher – this is one of the main findings of the new American Express Merchant Barometer and is a sentiment that spans both the physical and online spaces, with attracting customers and generating sales the main drivers for firms.

The evolution of the customer base and their payment habits is an integral reason why offering newer formats such as QR codes and instalment options is increasingly viewed as essential to growing digital and physical footfall and taking more money, in particular amid challenging market conditions.

A study from Aurora Capital paints a similar picture. According to the research, almost 80% of 16 to 24 year olds are now using mobile payments, while the use of this payment tech is also growing in older age groups. Small firms need to keep up with this trend, and others in the payment options space, or they risk losing sales.

What is stopping small firms from investing in payment options?

However, for all the recognition of the importance of offering multiple payment options, commitment to investment is underwhelming. Going back to the American Express report, less than a fifth of small businesses are prioritising such development in 2025.

Why the reluctance to invest? Cost has to be a primary factor. And not that related solely to spending on new payment systems – there is also the rising threat of payment fraud to consider, in terms of the direct financial consequences and the need to invest in protection and prevention.

According to research from Tink, payment fraud is costing businesses billions in customer loyalty and repeat businesses every year. Notably, the study points a finger at a growing unwillingness among customers to use some payment methods because of a lack of trust and a fear of fraud.

How alternative finance can help fund payment tech investment

Small business are in a tricky position when it comes to payment options. The reasons for investment are clear, but at the same time, current market conditions make accessing finance challenging. How can firms spend while safeguarding cash flow?

This is where alternative finance can help.

Small business lending from traditional sources remains subdued in Q4 2025, with almost 40% of firms finding accessing affordable finance one of their biggest challenges. Against this backdrop, services such as invoice finance, asset finance and peer-to-peer lending are proving a vital source of capital for small businesses in the current funding climate.

These alternative finance facilities, which offer a more easily accessible, affordable and personalised approach to lending, are helping small businesses survive and target recovery, stability and growth.

Notably, the Growth Guarantee Scheme is providing a wide range of finance facilities to smaller firms, including asset finance, invoice finance and asset-based lending. This is further proof that alternative lenders are increasing filling the small business funding gap.

Small firm finance options for payment tech investment

While investing in the current climate is undoubtedly challenging, it is vital that small businesses keep pace with the development of customer payment options, not least because of what this means in terms of sales.

This is why, against the backdrop of continued caution from traditional lenders, it is important that key decision-makers are aware of all the finance options available them, including the services of alternative lenders.

To find out more about A&T Business Associates services, contact Tony Hedger on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.