A Master Class on Helping SMBs Thrive in an Omnichannel World

The small businesses that are the backbone of each community across the United States are, collectively, the mainstay of everyday life. They employ millions who power spending and the economy.

Yet these small businesses and even micro businesses have had their share of challenges, especially during the pandemic. Capital has become expensive, and digital transformation has demanded that they pivot to set up online storefronts and omnichannel operations.

In a series of six interviews with PYMNTS TV, Visa executives weighed in on how small- to medium-sized businesses (SMBs) can thrive in the current environment — if they keep their fingers on the collective pulse of their markets, embrace technology and consider that payments are critical.

Be Mindful of the Demographics

SMBs need to know their markets, which are always changing.

Merchants have much to gain if they find a way to the hearts of Generation Z consumers and get them to click on the buy button, in-store or online, said Kirk Stuart, senior vice president and head of North America Merchant, Acquiring and Enablement at Visa. Gen Zers are the first generation to grow up with digital-first technology from birth.

Complexity Must Be Rendered Simple

The shift to eCommerce holds promise, but there’s no one-size-fits-all approach. Complexity is a hallmark of any pivot that has a digital channel, and for smaller companies, the challenge might seem daunting.

Sara Craven, general manager of Visa’s solutions Authorize.net and Verifi, said when things work, “it all feels very natural.” However, what goes on under the hood — and behind the scenes — is complex, involving a broad range of players.

It’s critical to ascertain that a customer is authorized to use credentials through a robust authentication process. Accounts must be verified, ensuring that card account numbers are legitimate and there are sufficient funds in place to satisfy the payment obligations.

“You don’t want to turn away good transactions, and finding the balance between authorizing the ‘good stuff’ and walking away from the transactions that may have some risk is really important … and the merchants don’t have to be payments experts,” she said.

Joining Craven in a separate interview, Ronald Pruitt, president and founder of 4aGoodCause, an online donation platform, illustrated the complexities.

The continuum of enrollment and keeping donors enrolled (and donating) is critical, as most of the charities that work with 4aGoodCause are small nonprofits led by their founders or have fewer than 10 employees, Pruitt said. They don’t have the resources to handle the complexities of payments, so they partner with Pruitt’s platform, gaining enterprise-level tools to help keep their nonprofits thriving as they accept mobile wallets and other payment options.

Data Makes Things Work

No matter the payment modality or the use case, no matter the vertical in which the business operates, payments choice can be informed by data.

Alex Burgin, vice president of Authorize.net, and David Larsen, head of marketing and eCommerce at Xidax PCs, said data — offering insight into what those customers want, what they need and how they want to pay — helps convert browsers into buyers into long-standing loyalists.

Along with payments choice, there needs to be a payment gateway that can take the payment credentials as they are presented, verify the funds and allow the merchant to send out goods or deliver services while collecting funds owed.

“Whether it’s a lemonade stand on the side of the road or a complex PC computer company, every business needs to accept payments,” Burgin said. “And at the core, every business needs to think about what their digital presence looks like and how they interact with their clients.”

The Eternal Battle: Beating Back Fraudsters

The specter of fraud haunts every transaction, especially the ones rendered and tendered online.

Craven noted that Authorize.net’s Advanced Fraud Detection Suite allows stakeholders to set rules to prevent fraud based on their customer bases, even for the smallest merchants. AFDS lets merchants set up as many as 13 fraud filters, such as minimum transaction thresholds and payment velocity or country limits.

AFDS and tokenization help protect the credentials surrounding the customer as merchants tighten and relax rules as they see fit.

Elsewhere, Visa Senior Vice President and Global Head of Risk and Identity Solutions James Mirfin and Jotform Head of Information Security Johannes Wiklund said small businesses are fighting a rising tide of synthetic identities.

Advanced Technologies Can Work Magic

Artificial intelligence and machine learning can bolster fraud defenses and improve the commerce experience itself.

Visa’s executives told PYMNTS that ChatGPT can be used by attackers to create convincing phishing emails and bombard small businesses but can also help Visa and other firms detect anomalous behavior while saving SMBs capital and time.

Andre Machicao, senior vice president at Visa Acceptance Solutions, and Josh Scheer, president and owner of White Lotus Travel Design, said SMBs can use AI to create marketing plans and product descriptions in minutes without a big marketing team. The tech can also help streamline back-end operations so that scheduling, reminding a customer of upcoming payment deadlines, and keeping on top of trends and news become automatic.

Machicao said Visa small business data showed that 1 in 5 U.S. SMB owners are very familiar with AI’s business capabilities.

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