If SMEs are “the new economy,” as an industry we need to help them to get trading online faster, says Nathan Jackson, VP of Business Development – Europe, at Credorax.
Now more than ever SMEs and independent retailers make up much of the high-streets in many of Europe’s towns and villages. These retailers and small companies significantly contribute to local economies, yet setting up and trading online – a must in order to grow business – has traditionally been extremely difficult for them.
Yes, there is the significant initial financial investment that’s required in order to develop a more sophisticated kind of website that accepts online payments. However, this cost isn’t necessarily the major barrier to e-commerce – the bigger issue for small merchants is the amount of time it takes from set up to being able to accept payments. Liquidity is crucial for these merchants and any delay in accepting payments can wreak havoc on their businesses.
The process begins with a retailer connecting its website to a Payment Gateway in order to securely send online payments for authorisation. Then, in what can traditionally take from weeks to months to complete, the retailer is required to set up a Merchant Account or Acquirer Account – a bank account specifically for the funds accepted online which is completely separate from the normal business bank account.
Although technological developments have opened doors for the financial sector and e-commerce arena, ‘traditional’ acquiring banks are still relatively slow at enrolling merchants onto their platforms (mainly due to legacy and legislation) and have not really adopted a long term multi-channel view. This slow process is a risky time for SMEs and independent retailers that need to start operating as a business to make money quickly.
Thankfully, there are now digital solutions available to SMEs, breaking down this barrier to e-commerce to help them get set up quicker. If legacy issues are stripped away, then merchant acquiring should essentially be a technology-based service, enabling a much speedier process. Today, innovative acquiring solutions have been built from the ground up to transcend the many challenges faced by the ‘traditional’ bank acquirers, who are forced to rely on legacy platforms and systems originally designed (when plastic payment cards were launched some decades ago) for point-of-sale, traditional retail store environments.
Solutions like these are ideal for the small merchants, as the rise of digital technology has enabled the process of getting retailers trading online to be much faster. The real secret ingredient in the entire process is at the onboarding level. In order for small merchants to be able to begin payment processing online quickly, it is critical for them to be onboarded (by an acquirer) in an extremely short timeframe and the only way this is possible is if the onboarding system is completely digital and automated.
A completely technology-driven onboarding system ensures retailers can be online, accepting payments in a matter of days rather than weeks and months, bypassing the ‘traditional’ systems and processes that are ill equipped for today’s multi-channel retail environment. In addition to rapid integration and onboarding that enables online sales and access to increased revenues much faster, robust and flexible solutions are now available that ensure merchants can do business with their customers however they want and whenever they want, providing a safe and secure customer experience – be it on a mobile device via an app, online, or in a traditional shop environment.
Further benefits of modern technology solutions built for this specific purpose include higher approval and conversion rates, a reduction in the number of chargebacks, and online chargeback handling. These are real advantages to all businesses trading online, but for SMEs that are much more susceptible to these fluctuations, it can significantly help to manage cash flow, financial management and ultimately, survival of the business.
An acquirer’s role in ensuring the future looks bright for these retailers is to reduce the amount of time it takes to begin being able to accept payments and this can only be done via a technology vs. legacy acquiring approach!