With Small Business Saturday coming up on November 27, there’s currently a focus on small and medium businesses (SMBs), and how they’ve adjusted to stay afloat during the recent pandemic economy.
Visa’s Back to Business study found that more than two-thirds (67%) of SMBs have tried a new approach to keep their business on track and meet shifting consumer demands since the onset of COVID-19.
Research from SEMrush found that “small companies that fully utilize technology earn two times more revenue per employee, experienced nearly four times the revenue growth annually, and were almost three times more likely to create jobs in the next year.” However, despite those benefits, researchers also found that 80% of small businesses are not taking full advantage of available technology.
Here are five ways independent software providers (ISVs) can use their software solution to help their small business merchants continue to grow their business.
1) Offer functionality to allow them to accept various payment methods
Convenience is important to customers, regardless of the size of the business at which they choose to shop. ISVs can help their SMB merchants provide customer convenience by enabling functionality that allows the merchant to accept various payment methods.
Preferred payment methods vary by customer, so merchants should accept traditional payments by credit card, debit card, cash, and check - as well as newer methods such as contactless payments and alternative financing (such as buy now pay later).
Newer purchasing methods that saw increased use during the pandemic, such as curbside pickup or contactless ordering via QR codes, are likely to remain popular, so ISVs should enable the functionality of these options for their merchants.
As an example, Juniper Research predicts that “QR code payments will be the most used digital commerce method in terms of volume throughout the next five years, accounting for 27% of all digital commerce transactions in 2024.”
The use of contactless payments grew exponentially during the pandemic, and now nearly 50% of consumers say they will not shop at a store that doesn’t offer a contactless way to pay. However, 19% of US small business owners don’t offer their customers a digital payment option at checkout. This reveals a gap that ISVs can help their merchants fill by including contactless payment functionality within their software offering.
2) Provide value-added analytics and reputation management features
ISVs can add value to their software offering by including analytics and reputation management features. These features provide merchants with deep visibility into social reputation, customer demographics, marketing reach, and competitors. This data allows merchants to make informed decisions about their business strategy.
Analytics and reputation management tools provide merchants a new way to engage customers, drive return visits, and manage their online reviews and reputation.
3) Enable them to create a unified commerce strategy
Most businesses are familiar with the term “omnichannel.” Omnichannel shopping is when a retailer provides multiple channels for a customer to make a purchase - such as in-store, online at a website, or through a mobile app.
However, an omnichannel setup often uses manual processes and multiple interfaces, resulting in siloed data. Retailers may not be able to easily sync information across those different channels, or to systems such as inventory management.
Merchants should go a step further and create a unified commerce strategy. In a unified commerce strategy, the processes and systems are all connected. This enables the business to have accurate and consistent data across all its channels and systems.
Research from Visa found that half of America’s small businesses had no online presence pre-pandemic, causing many of them to have to scramble to implement an online presence that can now be incorporated into a unified commerce strategy.
One reason so few SMBs had an online presence pre-pandemic was that they were concerned about data privacy and security - 32% of respondents to a Visa survey listed this as one of their top concerns about shifting their business online.
Visa’s survey also found that 53% of SMBs are “likely to purchase a fraud management tool/solution to help protect their business and customer data from being stolen due to the shift to digital and remote commerce.”
ISVs can help by offering a suite of security features within their software solution to help merchants protect credit card data, prevent counterfeit fraud, and enhance payments security. These security features can include encryption and tokenization.
4) Offer alternative financing options
Alternative financing options such as buy now pay later (BNPL) have recently increased in popularity. Offering an alternative financing option can result in a 17% increase in incremental sales and a 15% increase in average order value. Nearly half of surveyed US consumers said BNPL plans would allow them to spend 10% to 20% more than they would with just a credit card.
Global Payments Integrated offers Delay Pay*, powered by TuaPay. With Delay Pay, merchants can give customers the option to easily buy now and finance through monthly installments. Customers can take advantage of more purchasing power. They can easily choose monthly financing options when paying, whether online or in-person.
Delay Pay simplifies the installment plan with a transparent payment schedule and no hidden fees. An easy and quick application process requires only a few data points for a real-time decision.
By offering alternative financing options such as Delay Pay, ISVs can help their SMB merchants boost revenue and increase cash flow.
5) Offer functionality for digital B2B payments
Small businesses need to be aware of any “hidden costs” within their operation. One area to look at is B2B payments and the cost of paying their vendors.
In March 2020, PYMNTS found that paper checks were still the most common B2B payment method, with 81% of businesses still paying other firms using this method. However, it’s estimated that on average, processing a single paper invoice can cost SMBs $22 - a cost that can quickly add up.
More and more businesses are looking into digital B2B payments as a way to reduce friction and costs. Digital B2B payments involve an online, electronic payables tool that provides businesses an efficient means to make payments to suppliers while reducing exposure to risk.
As you can see, there are a number of ways ISVs can help their SMB merchants grow their business. Global Payments Integrated is a one-stop-shop for ISVs who want to implement any or all of these ideas - contact us today to learn more.
*Global Payments Integrated is not a consumer lending company. Delay Pay is powered by TuaPay, a consumer financing solution that pays merchants upfront and allows consumers to pay over time.