The Evolution of Small Business Payment Solutions - Survival of The Fittest

It’s sometimes hard to remember a time before widespread credit card adoption, but it is true that there once was a time when small businesses were still agonizing whether or not to embrace credit card payments. Today, the dust has settled on that debate and the outcome is clearly in favor of accepting credit card payments regardless of any costs or apprehensions around the processing technology.

Now a similar movement is underway toward new payment technologies that are once again poised to help businesses take the next step in their growth story. With credit cards firmly established as one viable option customers and businesses are once again leading the way toward a new generation of digital payment solutions, which in turn is driving forward-looking businesses to embrace multiple payment types.

These new payment solutions are driven by technology and are designed to more than offset their direct cost by making it easier for customers to pay and delivering business owners’ additional insight into their cash flow. For businesses looking to expand, tap new markets, or make a move toward financial security it makes more sense than ever to consider the latest trends in payment technology.

The Move toward Selling across Multiple Touch Points and Channels

With the rapid spread of reliable internet and e-commerce capabilities customers are increasingly looking for options on how, when and where they make purchases. Large corporations and small businesses alike are adopting a multi-channel approach for sales and servicing that includes physical brick-and-mortar locations operating in tandem with an e-commerce website. Customer demand is driving a surge in online business conducted via computers and mobile devices, making an effective strategy for processing mobile payments as important as having a reliable point-of-sale process for conducting face-to-face business.

Given the double-digit growth rates of e-commerce smart businesses are increasingly finding innovative ways to adapt to this new reality through the use of fully integrated payment solutions. In today’s world, the capability to handle different payment types from a variety of devices and locations is a pre-requisite for small business success.

Enhanced Security Features

With stories in the headlines about breaches in electronic security at some of the most significant retail and financial services brands out there, it’s no surprise that technology providers have sprinted to close the cyber-security gaps.

In response to these high profile incidents contactless payments have gained traction as a viable method of payment. A simple swipe of a contactless card at a merchant POS system allows for a purchase to be made without actually transferring credit card information, thus adding an additional level of security and privacy to payments.

EMV chip credit cards are finally here. This technology isn’t necessarily new, having been in use in Europe for some time, but the advanced micro-chips embedded in the cards themselves use Near Field Communication (NFC) technology to combat the most common ways cyber-thieves steal credit card data. This technology has proven effective enough that, as of October 2015, credit card companies are no longer covering fraud committed against merchants who aren’t using EMV. In other words, businesses that are slow to adopt this technology are risking significant levels of charge backs and fraud, problems that tend to severely impact small businesses particularly.

With over a billion EMV cards issued, this is a great time to go ahead and get the latest equipment for processing these enhanced payment methods. Such equipment isn’t necessarily expensive, coming in as low as $300 - $500 on average.

Business Is Going Mobile, and So Is Money

In the last few years mobile payment solutions have gone from being an interesting piece of gadgetry to a reliable and widely adopted part of the payment ecosystem. The introduction of “mobile wallets” by technology leaders like Apple and Google has legitimized mobile payments in short order, allowing customers with smart phones to make wireless payments with a touch of their phone.

As with other NFC payments, credit card information doesn’t end up in the hands of the merchant. Instead, an authorization code is generated and provided and transmitted. Today Visa (through their payWave offering) and MasterCard (via PayPass) are entering the mobile payment space, meaning that small businesses are almost certain to benefit from adopting these payment solutions. Best of all, once you have the capability to process NFC payments there are no extra expenditures needed to get started.

Enhancing Cash Flow Management with Technology

It wasn’t long ago that businesses only had to worry about using merchant services as a way to complete end-to-end processing of credit card transactions. Now that the internet and online access are the new normal for businesses of any size it’s possible to tap into solutions that bring together information on payments and payment methods all with a few clicks of a mouse (or swipes across the face of a tablet).

The added efficiency in processing and managing transactions has returned valuable hours to business owners, resulting in substantial cost savings, and with cloud-based solutions it’s possible to access critical information with equal ease at the office or on the road. Tight integration of all available data on inventory levels, sales forecasts, as well as any receivables and payables means that businesses can be run, in real time, with more ease and convenience than ever before.

Payment Technology: Are You Racing Ahead of the Competition or Treading Water?

Just like the old debates surrounding adopting credit cards as a method of payments, businesses today are finding themselves at a crossroads when it comes to adopting the latest payment technology to survive and prosper. The question isn’t “what are the expenses associated with these technologies", as it seems clear that failure to keep up with these trends in payments will cost far more than implementing some inexpensive technology. While there is no way to get around the basic expenses of offering customers a variety of ways to pay, business owners can still compare the solutions and value provided by various banking and merchant services partners in the marketplace.

There are banks whose core competency is working with small businesses and offering packaged bundles that are appropriate for different businesses with custom needs. Talking to one of their knowledgeable experts about what option is best for your business can save you both time and money.

Again, it’s not just a question of cost but of customer expectation and customers are increasingly voting with their digital wallets!