Buoyed by reports of record 2018 holiday spending, analysts predict more retail growth in 2019, particularly in the evolving small and midsize business (SMB) sector. Advanced technologies have introduced SMBs to a big-brand experience and new set of challenges.
Independent research by global payments provider Paysafe Group found SMBs struggle with “competing priorities” in their efforts to balance frictionless checkouts with payment security. Lost in Transaction: The future of payments for SMBs, published by Paysafe in October 2018, found 54 percent of ecommerce merchants surveyed believe frictionless transactions, such as in-app payments, make them more vulnerable to fraud. Seventy-six percent reported feeling aggressively targeted by fraudsters.
This is the first article in a two-part series that takes a deep dive into today’s SMB market. It takes a deep dive into evolving SMB environments and includes research findings and commentary by payments industry leaders innovating in the space. Part 2 will examine how merchant level salespeople (MLSs) can use their industry knowledge and personal experience to solve the most pressing issues SMBs face.
Help me innovate
During the past two years, Paysafe Group’s Lost in Transaction series has highlighted global payment trends. In its latest installment, researchers surveyed 601 card-not-present (CNP) SMBs in the United States, Canada, United Kingdom, Germany and Austria and 306 card-present SMBs in the United States and Canada. Respondents shared attitudes about payment acceptance methods, innovation and the customer experience.
O. B. Rawls IV, chief commercial officer, payment processing at Paysafe, said the research revealed that brick-and-mortar retailers aspire to truly innovate at the intersection of payments and the in-store experience. In response, Paysafe’s sales discovery process has evolved from price and service discussions to needs assessment and solution selling, he noted. Direct and indirect sales representatives have been centering conversations with merchants about security, data protection, business management tools and POS solutions.
“The end goal is to help our customers implement solutions that enable them to better their business,” Rawls said. “By consulting with the customer, we are able to provide them with solutions that meet their needs and are reliable and easy to use.”
Solve my pain points
Rawls also mentioned that MLSs with good listening skills can get to the heart of customer pain points and offer targeted solutions to help them achieve business goals. When you understand their type of business, wants and needs and how they’re managing certain functions, you can provide merchants with multiple options to consider, he stated.
Paysafe researchers found small and midsize merchants are buying into a fragmented landscape, with “significant divergences between different countries in the methods accepted.” Following are survey respondents’ most frequently cited pain points:
Accept more payment types: Merchants want to accommodate their customers by accepting as many payment types as possible, including cross-border currencies. Most North American merchants surveyed support contactless payments, which they see as a stepping stone to a more seamless checkout experience. Only 6 percent of respondents currently accept cryptocurrencies.
Balance security with ease-of-use: More than half the merchants surveyed are concerned that removing friction from payments increases exposure to fraud. Seventy-four percent believe fraudsters are increasingly targeting online businesses. Most merchants believe their payment service providers (PSPs) are responsible for protecting transactions.
Improve transaction and settlement speeds: Customers need smooth and quick transactions; merchants need to receive the funds in their accounts as soon as possible. It can take up to two days for a transaction to fully clear in a merchant’s account, although some PSPs are paying ahead of bank clearances to help their clients, researchers found.
Improve conversion rates: Combating abandoned transactions is critical. Businesses can no longer sustain 11 percent checkout abandonment rates and need to address the underlying reasons for customers dropping out of transactions and leaving shopping carts. CNP merchants believe having smoother payments will boost conversion and retention rates.
Monitor, detect and prevent fraud: Credit card fraud remains a top concern for SMB merchants. Thirty-six percent of respondents saw credit cards as the most vulnerable payment method; 25 percent were concerned about cryptocurrencies; 59 percent named security as a priority when choosing a service provider.
“When it comes down to it, knowledge is key,” Rawls said. “Not only should salespeople be knowledgeable about what they sell on a daily basis, but they should have a strong knowledge of all possible solutions that can be offered to SMBs. By listening carefully to their merchant’s needs, they will be able to provide a solution that is the best for the merchant’s business and build trust and, hopefully, a long-term customer relationship.”
Read the full article on The Green Sheet here.