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Small and medium-sized businesses (SMBs) are the backbone of the U.S. economy yet are often overlooked by the financial industry. While large companies typically get more press, small businesses in the U.S. represent 33.2 million companies, approximately 99.9% of all businesses, and contribute 43.5% of gross domestic product.1
By focusing more on these businesses, financial institutions have a golden opportunity to expand their market reach. Despite their diversity—from mom-and-pop shops to mid- sized service organizations—SMBs share critical needs in areas like customized service, digital technology, and cost management. Offering tailored solutions to help them meet these needs can transform these relationships from transactional to trusted partnerships.
So how can financial institutions help SMBs stay ahead in a market that is rapidly evolving in terms of technology and customer expectations?
Rising Customer Expectations
In today’s digital-first world, consumers increasingly expect convenience, speed, and choice when they buy. More than 70% of customers say they’d make digital wallets their primary method for shopping and over half say they’ve stopped shopping with a merchant simply because they didn’t accept digital wallets.2 These consumers have become accustomed to the advanced payment methods and level of service they get from larger companies.
One thing is clear. Barriers at the checkout level can impact customer satisfaction and loyalty. Without these enhancements to the payment experience, SMBs risk losing their customer base to local or online competitors.
Key payment methods customers expect:
However, navigating customer preferences for advanced payment methods can come at a cost. For many SMBs, card acceptance cost are their second biggest expense after payroll. Additionally, inflation continues to take its toll on small businesses—48% experienced a significant impact on their cash flow in 2023 and many had to increase prices.6 While upgrading payment systems is crucial to maintaining competitiveness and customer satisfaction, SMBs may struggle to manage the costs associated with these upgrades.
How financial institutions can help SMBs
By partnering with a reliable merchant services provider, financial institutions can offer payment processing solutions that are cost-effective and directly address common pain points for SMBs, including:
Tailored Solutions that Drive Growth
Additionally, merchant service providers that cater specifically to the unique payment requirements of SMBs can enable financial institutions to offer tailored solutions that can help drive both top and bottom-line growth, such as:
According to a recent study, 52% of SMBs say an all-in-one platform results in easier cash flow management by facilitating faster payments.8 For instance, Elavon's talech solution demonstrates the versatility and adaptability that an integrated payment solution can bring to an SMB.
For retail businesses, talech helps retailers manage everything from inventory to customer interactions--enhancing the shopping experience, minimizing wait times, and streamlining transactions. For restaurants, talech's portable payment technology can significantly improve service by facilitating faster transactions and providing options like splitting bills or electronic tipping.
With four primary offerings — talech Mobile, talech Starter, talech Standard and talech Premium — there’s a solution to support virtually any size of SMB, with an easy upgrade path as they grow.
For financial institution, this means:
For the financial institution’s business customers, this means:
The advantages to financial institutions and their business customers alike are clear. By adding solutions like talech into their offerings, financial institutions enable SMBs to offer the latest payment options, manage their day-to-day operations, and adapt to the rapidly changing digital marketplace. This in turn enables the financial institutions to deepen their engagement with this critical market segment, so they can boost their overall market share and further establish themselves as proactive, responsive partners in the business community.
1 - https://www.uschamber.com/small-business/state-of-small-business-now
2 - https://www.forbes.com/advisor/banking/digital-wallets-payment-apps/
3 - https://fitsmallbusiness.com/contactless-payment-statistics/
4 - https://www.forbes.com/advisor/banking/digital-wallets-payment-apps/
5 - https://www.pymnts.com/buy-now-pay-later/2023/bnpls-surge-in-2023-impact-adoption-and-regulatory-crossroads/
6 - https://www.xero.com/us/media-releases/half-small-businesses-feel-impact-inflation-cash-flow/
7 - https://www.pymnts.com/real-time-payments/2024/42-percent-of-smbs-would-pay-a-fee-to-receive-instant-ad-hoc-payments/
8 - https://www.pymnts.com/partnerships/2024/godaddy-and-upwork-partner-to-connect-businesses-and-web-designers/
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