Payment Acceptance, Key Hurdle To SMB Success

With the economy growing and regulations loosening, there may never be a better time to set up a business. But then, what good is starting a business if it can’t get paid efficiently?

Accepting payments, as Ecwid’s VP of Strategic Markets, Sridhar Nagarajan, describes it, is the most vexing problem that merchants need to solve. As of Q3 2016, less than a third of B2C SMBs and a mere 10 percent of B2B SMBs had the capability to accept payments online, according to the PYMNTS SMB Technology Index.

“Payments is a huge friction point for SMBs that want to get up and running quickly,” Nagarajan told PYMNTS. “When we analyze customer behavior, we find that a lot of merchants struggle to find success as they fail to overcome the hurdles of setting up their payment options. It’s just too complicated.”

For SMBs, that simplification process isn’t always, well, so simple.

A Solution Handmade for SMBs

In today’s market, even for SMBs, expanding an online presence doesn’t stop at rolling out an eCommerce platform.

Modern consumers want and expect more from their relationship with merchants. From ordering groceries online to going to a retail store and comparing prices on a mobile app, or even shopping with the help of virtual reality (VR) or augmented reality (AR) — omnichannel interaction between consumers and merchants is now the new standard.

And while providing an omnichannel experience is easier for large retailers, it can be a gargantuan task for smaller merchants, especially online startups.

SMBs don’t typically have the deep pockets of big-name retailers and are left struggling to keep up with rapidly evolving technology and to offer a seamless payment and shopping experience, Nagarajan said.

When launching an omnichannel platform, SMBs want to be able to maximize their return on investment, he added.

“Small businesses don’t typically have the resources as larger ones,” he said. “Especially if you are online or if you just started and you’re growing your business, and you are a sole proprietor or have a very small employee base — you want to be able to leverage all the existing investments you’ve made in your website, infrastructure and so on.”

And making sure those investments in digital don’t go to waste often means partnering with the right providers that can help maximize a retailer’s efforts — a strategy that Ecwid has instilled in its own platform.

The San Diego, Calif.–based company recently partnered with Wix, a website-building platform, to help SMBs manage service providers and build their own websites.

The company has also embraced a “freemium” model to appeal directly to small businesses that may not have the available capital to make a large investment in a sales platform.

Merchants want a trial period before they make a big investment, Nagarajan pointed out.

So far, the strategy has paid off.

“It really increases our marketing reach and helps us grow our customer base quickly, and it encourages strong merchant engagement early in the lifecycle,” he explained, noting that the model allows the company’s 1.5 million users to purchase only what they can afford to use as they grow.

Building White-Label Payments with Collaboration

For SMBs, providing customers with an optimal omnichannel experience is, in a way, piecing together a puzzle in which payments are positioned right in the center.

However, the payment platform landscape, as it stands, remains fragmented when it comes to small businesses.

Online merchants are often left with no choice but to rely on multiple solutions in order to accept payments in different currencies from customers spread out around the world.

“Payments has always been a key component of enabling commerce or eCommerce for small businesses,” Nagarajan said, pointing out the need for merchants to work with a one-stop shop, white-label solution that can make the experience seamless for their customers.

For SMBs to extend an array of payment options to their customers, Ecwid has partnered with WePay to connect them with over 50 payment gateways and processors. The offering presents SMBs with a white-label solution that removes the need for investing in multiple solutions.

“So we’re combining the SMB-focused feature set of Ecwid with the core competency of WePay in payments and risk management,” Nagarajan said.

And while extending seamless payments and omnichannel offerings is starting to become a dire necessity for merchants, it seems being able to do so in a timely and scalable fashion is now all the more important.

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To download the April edition of the PYMNTS.com Payments Powering Platforms Tracker, click the button below.

About the Tracker

The Payments Powering Platforms Tracker, powered by WePay, serves as a monthly framework for the space, providing coverage of the most recent news and trends, along with a provider directory highlighting the key players contributing across the segments that comprise the payments-integrated platform ecosystem.