SMBs

Survival Of The Fittest And SMBs' Great Digital Shift

How SMBs Are Making Digital Shifts To Survive

The global pandemic’s emergence radically shifted the entire small- to medium-sized business (SMB) landscape almost overnight in terms of digitizing operations, according to Alex Burgin, vice president at Authorize.Net (a Visa solution), and Kirsten Potenza, CEO and founder of POUND – Rockout. Workout.

The pair told PYMNTS in a recent conversation that merchants who thought of themselves as in-person service providers have been pushed into a big digital pivot.

“In a post COVID-19 world, businesses have to make sure they can still provide their services and goods, while extending them and taking payments in a digital way,” Burgin said. “We have seen a big shift in that behavior as merchants figure out how to use different tools.”

As Potenza told PYMNTS, merchants had to make the shift regardless of whether they had been interested in going heavily digital prior to the pandemic. She said POUND had been “anti-virtual” before the pandemic hit but had to reconsider when government lockdown orders banned in-person fitness classes.

Potenza noted that the company had to suddenly allow instructors “to teach virtually, and also provide really different options for them to be able to develop where they need it.” She added that Authorize.Net — which has been a long-term partner — helped POUND navigate a very new playing field.

Burgin said Authorize.Net has been extending help to SMBs across a host of verticals as cash flow concerns have become crucial and the need to get paid digitally has taken center stage. But Burgin and Potenza said SMBs are actually finding ways to thrive in the new landscape. They said they expect that a year from now, going digital won’t be a complicated undertaking that businesses have to do, but will be something they want to do because, like POUND, they see a clearer road to recovery when it’s enabled by digital payments.

“We’ve seen that it actually allows our community to grow and connect in a way that we could have never imagined before,” Potenza said. “We’ve been able to connect instructors and participants in different global markets around the world. It’s been an amazing opportunity.”

Amazing, but harrowing — and intimidating to SMB owners who may not have set out to become armchair technologists when they opened dry cleaner stores, for instance. That’s why simplicity must be the starting point of any digital upgrade, Burgin said.

Keep It Simple And Customizable

Burgin said that technology integrations and upgrades — particularly those involving payments — can look an awful lot like a tall mountain to climb for the average entrepreneur. After all, entrepreneurs are typically very talented and knowledgeable about the goods or services they provide, but they may not be as well-versed with the latest technology trends or application programming interfaces (APIs).

“They are really good at running their businesses, but jumping into code, APIs and other technical integrations may not be something they are overly familiar with,” Burgin said. “So, it's something we try to make as simple as possible.”

He said he believes that the key to a successful technology integration is simplicity — particularly in the current pandemic conditions. Getting up and running with digital payments is mission-critical right now for the many SMBs that are feeling the sting of diminished revenues and are looking to stabilize their cash flows.

For Authorize.Net, that has meant rolling out functionality that makes it easy for merchants to attach a digital invoice to an email and be paid electronically. Or, the business can quickly stand up integration-free virtual terminals that allow merchants to log in and easily accept secure digital payment via phone, or turn any mobile device into an active point-of-sale (POS) location.

According to Burgin, what’s most important is that “we make it easy for small businesses to find technologies that suit their needs.” That includes connecting SMBs with tech partners, “so if they do get stuck in that development process or if they need some more specialized support, we have a great partner network who can support them.”

The More Innovative Future

As Burgin and Potenza pointed out, many merchants that have been hit hard by physical closures and are looking for rapid digital pivots have leaned heavily on such support. But now that many SMBs have made the initial digital jump, merchants across all sorts of verticals are starting to radically reconsider what they do and how they do it.

In Potenza’s case, she’s been reconsidering the “human connection” that workout communities provide — and how to both change and expand that in a post-pandemic world.

“Human connection is why we do what we do,” she said. “Humans around the world are really learning and feeling the importance of coming together in a group fitness environment. Whether that will be virtual or physical in the future depends on how instructors want to build their own personal fitness business.”

Potenza noted that there will be inevitable ups and downs over the coming years, but she said in POUND’s experience, enriched digital relationships are helping the business solidify its foundations.

Burgin added that the most exciting parts of the future probably won’t be the things we’ve already seen, but the things that are coming next, as those rushing into the world of digital-enabled payments and commerce build new and innovative solutions.

“I think innovation really will be interesting to watch over the next year, [along with] how businesses will continue to adapt and innovate in this new era,” he said. “I think we will see fantastic examples of businesses that have been able to see the change, pivot and create a whole new set of virtual solutions for their clients. … I'm most excited about seeing the innovation within small businesses, which really are the lifeblood of our society.”

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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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