Advances in payment technology are giving small businesses new tools to compete for holiday shoppers, according to a study released today by the Electronic Transactions Association (ETA) and TSG (The Strawhecker Group).
The sixth annual Consumer Holiday Spending Study found that 36% of consumers who don’t typically shop at small businesses say they would if local merchants offered the same payment convenience as big-box stores. With 51% of consumers planning to spend more than $500 on holiday gifts, up from 39% last year, even a modest shift toward small businesses could translate to significant revenue gains for local merchants.
The study also identified a significant opportunity in rural America, where consumers show the strongest loyalty to small businesses—54% prefer shopping locally, the highest of any area. Rural consumers show lower adoption of newer payment methods, but the study found that education and clear security messaging can help overcome hesitation, enabling rural merchants to capture more market share.
“The payments industry serves every merchant—from the corner café to the big-box retailer, from Main Street to the mall,” said Jodie Kelley, CEO of the Electronic Transactions Association. “For all merchants, especially SMBs, today’s payments innovations open new markets and build customer loyalty—allowing them to meet consumers where they are going to be, safely and securely. These parallel efforts of innovation and fraud prevention are keeping commerce fast, secure, and inclusive.”
The study of 1,027 U.S. consumers, conducted in September 2025, reveals that payment experience has become a critical preference in driving shopping decisions. Roughly 85% of consumers have tried tap-to-pay technology, and 48% have experimented with digital wallets—adoption rates that create real opportunities for businesses offering modern payment options.
“The technology infrastructure now exists for any business, regardless of size or location, to offer modern payment experiences,” said Mike Strawhecker, president of TSG. “Rural merchants have a built-in advantage with strong customer loyalty. Adding modern payment options, combined with education and security messaging, can help them keep that loyalty while competing more effectively against online retailers.”
The study also found that free shipping has emerged as the top priority for online shoppers—even more important than price—and that urban consumers are leading payment technology adoption, making cities ideal markets for innovative checkout solutions.
