PAAY: The Year Of Small Business

Yitz Mendlowitz, founder and CEO of PAAY, shares his insights on how the pandemic has impacted small businesses, and what they should do in the year ahead to prevent fraud and survive in the new digital economy. “With an effective fraud prevention solution, businesses can successfully adapt. We’re here to help them do just that,” he says in “A Look Forward: What Executives Wish for America and the World in 2021.

Looking back on what has been a challenging year, my thoughts are on small businesses. We’ve seen first-hand how local establishments have struggled. In my neighborhood, many staples of the community have closed. So, it is my sincere hope that in 2021 small businesses are able to surmount the challenges of the pandemic and thrive. From conversations with friends and reading newspaper statistics, I know that Americans are dedicated to increasing their support of local businesses going forward. I hope that these good intentions make a difference and allow small businesses to persevere.

I know that through my work, I have also endeavored to support them. As an entrepreneur, I recognize the challenges of adapting to new circumstances. One hurdle that many of these businesses faced for the first time was the transition to eCommerce. With the shift to online shopping greater than ever, businesses were forced to convert to online. But in many cases, your local pizza shop or bookstore never expected to do so and were not prepared. Even as they converted to online payment transactions, they faced yet another major challenge: online payment fraud. It is estimated today that 86 percent of all chargebacks are probable cases of chargeback fraud and for every dollar of fraud committed, U.S. retailers incur $3.13 of costs. This represents an ongoing problem the industry has faced. The rails of the payments industry were not built for eCommerce and have long remained that way. But eCommerce fraud solutions like our EMV 3DS have offered relief. Earlier iterations of EMV struggled to perform user authentication without disrupting the consumer. Our EMV 3DS addresses these shortfalls and is designed specifically for remote commerce transactions. We’ve seen businesses’ investment in 3DS increase rapidly. At PAAY, we have seen a YoY growth of over 150 percent in new customers.

Those businesses that converted saw their chargeback rates drop almost immediately and we are over the moon to have been able to contribute to businesses’ survival by making the transition to an “eCommerce first” model smoother. I believe that businesses can prepare for 2021 by prioritizing the implementation of these remote payment security solutions. The adoption won’t only be important for the duration of the pandemic but it will also set businesses up for success in years to come. Previously, younger generations made the majority of eCommerce purchases. But as a result of the pandemic, older generations were forced to adapt as well. Now more comfortable with delivery, curbside pick-up and shoppable social media, these groups will only continue to increase their online buying habits. This growth in the eCommerce shopper demographic further validates why eCommerce is here to stay.

As the PAAY team looks ahead, we are working to continue empowering our customers by providing them with secure payments. Many small businesses are not converting to fraud prevention techniques because they don’t know they exist or why they need them. Having never run an eCommerce business before, they don’t know about the dangers of card-not-present fraud. But with an effective fraud prevention solution, businesses can successfully adapt. We’re here to help them do just that.