What Can Acquirers Do To Keep Up With SMB Payment Expectations? Three Tips For a Better Merchant Experience

What Can Acquirers Do To Keep Up With SMB Payment Expectations? Three Tips For a Better Merchant Experience

What Can Acquirers Do To Keep Up With SMB Payment Expectations? Three Tips For a Better Merchant Experience

John Jakobe

John Jakobe

John Jakobe is a market research analyst at The Strawhecker Group. He has worked within the payments industry for nearly five years, and has experience in nearly every aspect of payments from Business to Business to Independent Software Vendors.

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Merchant acquiring is an industry under transformation. Historically, it has been a steady, mature industry serving the needs of merchants to accept debit and credit cards at the point of sale (POS). It's safe to say this is not the case anymore.

A sea of change is occurring in the way consumers shop, and that means big implications for the way they pay. Smartphones and tablets are at the heart of this retailing revolution, with new technologies such as cloud, analytics and social media also driving change. These same technologies are enabling new ways of paying and enabling new entrants to bring new payment propositions to the market in a frictionless manner.

So what makes for a typical customer in today's digital world?

  • They want to be able to buy when, where and how they want.
  • They switch between different channels as if they are one and the same — and expect the same experience.
  • They expect to fulfill all their business management needs from a single solution.

Clearly, the product and technology offerings that enable these consumer expectations are important. However, it's the implementation, sales and service of those products that craft and deliver the initial merchant experience — and thus shape consumers' opinions.

A sound merchant experience

Merchant experiences must be built for real small and medium-sized businesses (SMBs) with actual needs, using the right products, fresh knowledge and coordinated, efficient efforts across the merchant services program. Building those experiences requires SMBs to be at the heart of your process. First impressions count, and that means the effectiveness of the merchant acquisition and boarding processes.

This is a key differentiator for driving new merchants to a portfolio. For example, acquirers who have invested in streamlining their systems in this area are experiencing average merchant onboarding turnaround times of two to three times faster than an acquirer that has not done so, and this is contributing directly to portfolio performance.

It's the implementation, sales and service of those products that craft and deliver the initial merchant experience — and thus shape consumers' opinions.

When thinking about the complexity of the merchant onboarding process today, it is quite staggering. But all of the steps — Know Your Customer (KYC) laws, credit checks and integration — can take three to five days or much longer. But this length of time is no longer acceptable. SMBs now expect an immediate response, demanding the ability to sign up and be approved for card acceptance in a few minutes, just like end customers who can apply for a credit card and get instant approval. If this speed and ease are not offered, an SMB will find another solution.

Three tips for a better merchant experience: 1) Automate the application process 2) Keep things simple and transparent 3) Bolster product sets

Keeping up with SMB demands

So what can acquirers do to keep up?

  1. Automate the application process
    The first step is to automate the application process. Without automation, the majority of the sales process is consumed by logistics, such as the application, underwriting and approval processes. Moving applications online without the assistance of a representative is a great start to streamlining and speeding up the process. This frees up time for the sales representative to provide a more consultative interaction and for the merchant to complete the application and move down the sales pipeline. This step allows applications to be verified automatically via an advanced digital ID and verification tool, which monitors application data, generates a validity score and expedites the application and underwriting process. The streamlining and automation of these processes lowers the merchant’s barriers to approval and improves the acquirer's chances of winning the business.

  2. Keep things simple and transparent
    The second step is to keep things simple and transparent. To keep the onboarding and sales process as efficient as possible, agreements and pricing should remain elementary and transparent. The pricing of merchants is always a very tricky topic and varies widely depending on merchant category code (MCC), volume, business model and a myriad of other factors. Abridging these processes by using month-to-month agreements and flat-rate pricing structures are effective tools to ensure the merchant's comprehension of the terms. These tactics appeal specifically to the SMB owners and can contribute to lower support and customer service calls.

  3. Bolster product sets
    Finally, the third step is for acquirers to bolster their product sets. Either through integration or acquisition, competitive acquirers will have to expand their offering outside of payments to offer seamless solutions that can operate as standalone business management systems. These products will need to facilitate point-of-sale, reporting, accounting, employee management, marketing, industry-specific features (i.e. table management), access to capital and much more. The end goal for these providers must be to offer an all-encompassing business management product, and the integrations and partnerships should be as seamless as possible. For example, WePay (Chase), offers an integration with the popular website builder Ecwid. Ecwid and WePay allow merchants to apply for a merchant account during the website building process, without leaving the Ecwid website. Through partnership and seamless integrations, both companies are able to offer their customers a comprehensive business solution with minimal legwork from the merchant.

A comprehensive solution for SMBs

By implementing these three best practices, acquirers are far more likely to better serve and retain SMBs. Implementing and providing an easy, quick and competitive solution is a key component that appeals to these SMB owners. As the transformation of the payment industry continues, it is pivotal for payment providers to bring fragmented technologies into a single cohesive solution for merchants and consumers, giving way to the future of unified commerce.

The statements and opinions of the writer do not necessarily reflect those of TSYS.

Other Articles by John

John Jakobe

John Jakobe is a market research analyst at The Strawhecker Group. He has worked within the payments industry for nearly five years, and has experience in nearly every aspect of payments from Business to Business (B2B) to Independent Software Vendors (ISVs). He has developed an expertise in targeted ISV partnerships, corporate strategy, and the payment-centric point-of-sale ecosystem. Jakobe has been central in developing The Strawhecker Group’s industry-first 'TruShop' and ISV research endeavors. He has worked with some of the largest players in the payments industry.

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