Unlike larger businesses, the payment processing landscape for small and mid-sized enterprises (SMEs) can be bewildering and expensive.
Small businesses often find it tough to manage issues such as fraud protection, payment integration, omnichannel payments, and calculating processing fees.
Fortunately, technology is changing the payment industry and enabling easy and secure electronic transactions. These technological advancements are enabling small business owners to enhance customer experience and improve their revenue.
In order to stay competitive in this dynamic scenario, it is crucial for SME owners to be responsive to the forthcoming trends in the payment industry. By being aware of these trends, business owners can proactively plan to address the imminent changes and use them to their advantage.
If you own a small or a mid-sized business, here are six payment trends you must watch out and prepare for to make your venture successful in the long-term.
1. Mobile-Responsive Applications Are Gaining Significance
Nearly 174 million U.S. citizens own smartphones and tablets and 62 percent of this population use mobile applications and websites for shopping.
A recent survey revealed that more than 50 percent of American SMEs have a mobile application, using it to improve customer experience, encourage customer loyalty, and stay competitive in the market.
Effective collaboration with customers is crucial to the success of small businesses. Mobile applications help firms connect with their customers and build strong brand equity.
On the other hand, with firms launching dedicated mobile applications, customers can order the required product or service without having to visit a store or wait in a queue.
In order to compete with larger firms and boost their bottom line, SMEs must help customers to connect with businesses using mobile applications and mobile-friendly websites.
The role of beacons and Geo-targeting in delivering tailored messages to customers in close proximity to stores also cannot be ignored. Statistics reveal that 82 percent of customers are likely to make purchase decisions in-aisle and 80 percent of shoppers use their mobile phones inside a physical store to look up product features and reviews and make a purchase.
Consequently, small and mid-sized enterprises must develop mobile-responsive applications and websites in order to capitalize on customer conversions and increase sales.
2. Mobile Payments Are on the Rise
The payments industry is rapidly evolving, with an increasing number of customers using digital wallets and mobile payment options to make purchases. The Near Field Communication (NFC) is the latest wireless technology driving this trend, enabling two electronic devices (the smartphone and the POS system) to interact with each other in order to complete a transaction.
Every smartphone offers a unique NFC functionality, allowing users to access their funds and make payments to merchants without physically using their credit cards. For instance, Samsung Pay is available for Samsung smartphone users, enabling them to make easy, secure, and quick payments to vendors.
In order to offer a seamless user experience, small business owners using this technology must ensure that their card readers are updated and NFC-enabled. This will allow an easy and fast exchange of the relevant information from the user’s smartphone to the mPOS device, completing the transaction successfully and generating the payment receipt.
3. Increased Usage of Cloud-Based Software
The cloud-based POS (Point of Sales) software is being increasingly preferred by merchants owing to its ease of use and compatibility with most point-of-sale hardware, including printers and cash-register drawers. The cloud-based POS system can also be directly accessed from the web using a variety of internet browsers.
Consequently, this system offers centralization of information, enabling merchants to track sales, analyze data, and update the inventory in real-time from anywhere.
Since all the banking and customer information is stored in the cloud, the need for a server where sensitive data is stored is eliminated. Consequently, the level of security with the cloud-based POS system is high, reducing the risk of identity theft or credit card breach.
Thus, SMEs should recognize the benefits of the cloud-based POS system and incorporate it into their business for easy and secure transactions.
4. Customer-Engagement Initiatives Determine Business Outcomes
Reward programs and subscriptions are innovative ways of engaging customers and guaranteeing a steady flow of revenue for SMEs.
Customers expect marketers to introduce attractive rewards and membership deals that meet their desires and requirements. In return, marketers get access to customer data (Big Data) that can be used for predictive analytics and user behaviour analytics.
SMEs must introduce reward programs that appeal to their target customers, helping them improve their customer retention rate. Promotions, deals, and coupons must be based on the customers’ preferences and buying behaviour.
Though subscription services offer a steady stream of income, marketers must strive to offer continuous value-addition to their customers, enabling them to retain their membership. Offering high-class service and effectively handling customer feedback will enable SMEs to reap the long-term benefits.
Developing and executing effective customer-engagement strategies can help small businesses expand their customer base and retain existing ones, enabling them to improve their bottom line.
5. The Surge of Digital Marketing
With the increasing smartphone penetration, a considerable number of online customers are able to access websites. Consequently, the responsibility of engaging these e-commerce customers lies with SMEs.
The e-commerce market is highly competitive and firms are increasingly using digital marketing strategies to make their customers’ shopping experience enjoyable and appealing.
If you desire to run a successful online business, you must cater to your target customers by considering the design of your website, the content, and the importance of optimizing your website for online search results (SEO). Using digital marketing tactics wisely will enable you to gain an increasing number of online conversions.
6. Artificial Intelligence Applications Continue to Expand
Numerous SMEs are using Artificial Intelligence (AI) to automate operations and enhance customer experience. AI applications such as Chatbots and RegTech (Regulatory Technology) are opening a new era of business-customer interaction.
Chatbots (also referred to as virtual agents or IM bots) are computer programs that respond to text or voice commands on a 24/7 basis, offering guidance to customers based on pre-programmed responses.
RegTech too is rising to prominence as it uses information technology to facilitate the delivery of regulatory requirements and offer solutions to the ever-increasing demands of compliance within the financial industry. RegTech is playing a crucial role in automating data distribution and regulatory reporting through big data analytics, real-time reporting, and the cloud.
Artificial intelligence will soon eliminate paper responses, enabling businesses to minimize human error and save time and other precious resources.
The above-mentioned payment trends and strategies will help you appreciate the role of technology in providing small business owners with an opportunity to reach the global audience in a safe and effective manner.