Payments News Desk: May 2026 Edition
May Payments News Desk explores SMB payment trends, digital growth, and fraud challenges.
Introduction
Welcome to the May edition of Payments News Desk, TRX Services' monthly series covering the latest developments shaping the payments industry. This month's stories highlight a growing divide between businesses that are embracing digital transformation and those struggling to keep pace, along with rising demand for more flexible payment tools and increasing concern around fraud risks.
From multichannel commerce and digital payment adoption to the growing threat of first-party fraud, the payments landscape continues to evolve quickly — and businesses that adapt strategically are positioning themselves for stronger growth and resilience.
1. Digital-First SMBs Continue to Pull Ahead
A new PYMNTS Intelligence report examining four years of small business data shows that SMBs embracing digital channels and modern payment methods are outperforming their peers. According to the research, businesses with stronger digital capabilities — including owned websites, digital payment acceptance and multichannel selling strategies — are reporting stronger revenue growth and greater long-term confidence.
The report highlights a widening gap between larger, digitally enabled SMBs and smaller businesses still heavily reliant on cash and traditional operations. SMBs with more than $1 million in annual revenue reported average growth of 13.7%, while businesses under $150,000 in annual revenue saw growth remain nearly flat.
Digital commerce is playing a major role in that divide. Nearly as many SMBs now sell through their own websites as through physical storefronts, and digital channels such as delivery platforms, mobile apps, and social media are generating some of the strongest sales growth. Meanwhile, cash acceptance continues to decline gradually as businesses adopt cards, ACH and digital wallets across both in-store and online environments.
The findings reinforce an increasingly important reality: modern payment acceptance and digital selling capabilities are no longer optional growth tools — they are becoming foundational business requirements.
2. SMBs Want More Flexibility and Control Over Payments
Another PYMNTS report reveals that many small businesses are eager for more flexible payment management tools, particularly when it comes to managing cash flow and supplier payments. The study found that 46% of SMBs would pay for business credit card features that allow them to adjust payment timing based on cash availability.
The report suggests that SMBs are not resisting digital payments out of preference for legacy systems. Instead, many businesses continue using cash and checks because they are familiar and operationally simple. What business owners increasingly want are payment tools that provide better visibility, stronger protections and more control without adding complexity.
Payment flexibility is becoming especially important in an environment where many businesses face uneven cash flow cycles and economic uncertainty. Features such as installment purchasing, adjustable payment windows, and extended terms are gaining appeal because they help businesses manage liquidity more strategically. The report also found that 63% of SMBs view business credit cards as the best method for disputing payments and recovering funds, underscoring the growing importance of payment protection and transparency.
For payment providers and financial institutions, the message is clear: SMBs are looking for solutions that combine digital convenience with practical operational support.
3. First-Party Fraud Continues to Rise
A recent PaymentsJournal article highlights the growing challenge of first-party fraud, a form of fraud in which legitimate consumers misuse payment systems for personal gain. Unlike traditional fraud involving stolen identities or hacked accounts, first-party fraud often includes behaviors such as falsely disputing legitimate purchases, abusing refund policies, or intentionally defaulting on payments.
The article notes that economic pressure, the growth of digital commerce, and the ease of filing chargebacks online are all contributing to the rise in these cases. As more transactions move into digital environments, merchants and payment providers are facing increased difficulty distinguishing between genuine customer disputes and intentional abuse.
This trend is creating growing operational and financial challenges for businesses. Merchants not only lose revenue from disputed transactions, but also incur additional chargeback fees, operational costs, and reputational risks. The issue is particularly significant in industries with high digital transaction volumes and flexible refund policies.
The rise of first-party fraud also reflects a broader shift in payments risk management. Fraud prevention strategies can no longer focus solely on external cyber threats — businesses must also develop smarter tools for identifying misuse within otherwise legitimate customer relationships.
Conclusion
The stories shaping payments in May point to a common theme: adaptability is becoming a competitive advantage.
Businesses investing in digital channels and modern payment acceptance are positioning themselves for stronger growth. SMBs are demanding more flexible tools to manage cash flow and payment timing. And merchants across industries are navigating increasingly complex fraud risks as commerce becomes more digital.
As payments continue to evolve, organizations that prioritize flexibility, visibility and customer-centric payment experiences will be best equipped to compete in the years ahead.
Stay tuned for next month's edition of Payments News Desk, where we'll continue tracking the trends shaping the future of payments.
