B2B Payments

Easing SMBs' Digital Transformations Through Online Payment Acceptance

Easing SMBs' Digital Shifts With Online Payments

Among the numerous ways small businesses have been affected by the global pandemic, the sudden race to launch online operations has been among the most profound — and may ultimately be among the most long-lasting changes to the SMB community.

Banks, FinTechs and small business solution providers have rallied around the effort to ease the digitization transition. But while there are many tools at entrepreneurs' disposal to make the shift, it can still be difficult to draw the most logical and frictionless roadmap to business model digitization that will alter the course of many small businesses' futures long after the pandemic.

Nikita Melnikovs, member of the board at card payments technology company DECTA, told PYMNTS in a recent interview that for many SMBs, the most obvious first step to the online migration may not actually be the best one.

"Most ... entrepreneurs start from a rather obvious step of website development," he said. "It does seem absolutely logical, up until the point that you start calculating costs."

A Digitization Strategy

For small businesses that were suddenly thrust into the position of having to migrate online, the pressure was immediate and intense.

Melnikovs said that "first and foremost," the most pressing issue is "too many unknowns."

"How to change business processes to adjust to market demands, how to make a website, how to accept payments digitally, how to market — these are all questions that offline businesses have to answer fast," he said.

PYMNTS' latest COVID-19 Business Recovery Report, a collaboration with American Express, found that 31.6 percent of SMBs expect to rely "much more" on eCommerce after the pandemic, noting that "organizations must go digital and explore various revenue approaches to outlast the pandemic."

As the report explores, it's an immediate priority for SMBs across industries to adjust their business models for a digital platform. From gyms introducing virtual workout classes to healthcare providers embracing telehealth technology, the digital shift is a requirement to keep business running.

But rather than focusing on launching that company website as the first step in the transformation journey, Melnikovs pointed to another vital focus of this digitization process that should take precedence.

The Payments Path

For SMBs, the ability to sell online isn't necessarily dependent on a proprietary website, thanks to platforms like Facebook, Instagram and other pre-built digital venues. Instead, said Melnikovs, the most important first step is to enable online payment acceptance and leave the work of setting up a website for later down the digitization road.

For B2B sellers, a key focus when establishing online payment acceptance is to ensure that workflows and experiences are optimized both for the small business itself as well as its customers. One strategic way of accomplishing this, explained Melnikovs, is to marry payment acceptance with eInvoicing, a function that he said often benefits the B2B commerce space even more than B2C.

For the corporate buyer, this combination optimizes their own internal processes.

"It simplifies company purchasing and accounting processes, therefore accounting may see information about the transaction — when did it take place, what was the order and its size – as well as the invoice," he said.

On the seller side, meanwhile, integrating the eInvoice with payment acceptance has similar benefits in terms of transaction visibility and reconciliation simplicity. Melnikovs pointed to the ability for B2B sellers' systems to automatically remember customers' past purchases and preferred payment methods, for instance.

Opportunities for value-added features through the coupling of eInvoicing and payments acceptance can include automatic payment reminders and notifications of unpaid bills sent to buyers.

Speed to launch is also crucial for small businesses that need to limit revenue disruption as much as possible. Earlier this month, DECTA rolled out its one-day merchant account opening solution, a service that enables businesses to migrate to an online sales model within 24 hours and gain access to the DECTA Gateway. It's a portal that connects businesses to eInvoicing capabilities, enabling them to generate a payment link directly on the bill. Sent via email, the eInvoice lets buyers make seamless card payments, while the DECTA Gateway can integrate with sellers' proprietary websites or third-party eCommerce portals like Magento and Opencart.

"This technology basically eliminates obstacles to buyers' payments," said Melnikovs.

The User Experience Focus

Flashy websites and stylish online stores can help to ensure that the digitization of a business model is successful. But as digital transformations progress, B2B companies are increasingly understanding the importance of user experience — not only in online shopping, but also in the online payment workflow.

Again, this focus on user experience can be applied to both ends of a B2B transaction. For sellers, the user experience of any third-party online payment acceptance and processing service provider must ensure seamless integration with the back office, support for data collection and accounting, and features to combat late payments.

For B2B buyers, meanwhile, the payment experience can be the difference between completing a sale and turning to a competitor that involves less friction in the process. Melnikovs said he expects this focus on digitization, online payments acceptance and the user experience to continue to play a prominent role for businesses in a post-pandemic world.

"Apart from total digitalization, which we expect in a post-pandemic market, we believe companies will become even more customer-centric," he predicted. "User experience will gain importance for companies, so solutions that do not provide a tailored approach will no longer be competitive."

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NEW PYMNTS STUDY: ACCELERATING THE REAL-TIME PAYMENTS DEMAND CURVE – NOVEMBER 2020

About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

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