Advances in payment technology and accessibility have allowed more small and medium-sized businesses to benefit from cutting-edge solutions for optimizing global payments.
While getting started with e-commerce has become easier than ever for many small and medium-sized businesses (SMBs), traditional challenges like cash flow, scaling, and sustainable growth still present many hurdles for online entrepreneurs.
SMBs can unlock significant value for their business by making or receiving payments strategically – while optimizing revenue, driving efficiency, and increasing working capital.
Modern digital payment capabilities benefit both the consumer and administrative sides of running a business. On the consumer side, offering the right online payment methods is an important part of securing customers in new markets. On the administrative side, optimizing payment traffic helps companies to improve revenue and profit margins by securing higher payment approval rates and the lowest possible fees. What’s more, many global payment solutions today combine payment gateway, payment processing, and payment optimization capabilities into one integrated offering – making the process much simpler for SMB merchants.
Implementing a sophisticated global payment platform is no longer as time-consuming or expensive as it used to be. Keep on reading to find out why modern payment capabilities are now within reach of all SMBs – and why now is the time to get started.
Why should SMBs go beyond a built-in payment solution?
How are SMBs using global payment solutions?
Benefits of a global payment solution for SMBs
When building or upgrading their online store, many small businesses today use off-the-shelf payment solutions available in e-commerce platforms like Shopify, Square, and others. But while this choice can bring convenience (particularly when just getting started), it also comes with significant limitations.
For one, e-commerce platforms typically offer a handful of built-in online payment method options like credit cards, PayPal, and others. But the selection of payment methods can be limited – making it a challenge to localize the checkout experience (which is particularly important when expanding into new markets).
Secondly, by accepting payments via only their webshop provider, companies do not have access to the full range of payment optimization options that a payment provider offers.
These are just two possible use cases. Another relates to the transition merchants make during their digital transformation journey. Any business owner can attest that growth always brings new administrative challenges. By implementing a specialized payment solution, small and medium-sized enterprises can significantly reduce the administrative burden on their business.
During the pandemic, many small businesses have embraced contactless payments and started offering online payment methods such as contactless payment cards, e-wallets, and SMS payments.
Long before Covid, many consumers were already turning to popular digital and mobile wallets such as Apple Pay or Google Pay because they make payments more convenient.
Now, with e-commerce entering a new phase, additional innovative payment methods like text-to-pay are cropping up to meet the needs of consumers.
Using a more sophisticated payment solution helps SMBs offer more online payment method options to customers at checkout – regardless of where the checkout takes place.
The Buy Now Pay Later (BNPL) trend continues to dominate e-commerce headlines, and for good reason. BNPL solutions are everywhere, as alternative financing options help to drive e-commerce spending and give consumers more flexibility when it comes to purchasing big ticket items.
By working with a payment provider that can enable multiple BNPL options tailored to specific target markets, SMBs have the chance to participate in a payment method generally associated with larger retailers. BNPL helps to streamline the process of accessing short term credit, enabling SMBs to reduce cart abandonment at checkout by providing immediate, automated access to installment payments and other forms of BNPL.
The approval process is fast, making payment easier for the consumer – particularly for larger purchases that may have previously required a loan or where the customer might have been hesitant.
For small to medium-sized businesses, analyzing payment data is a valuable way to gain insights into their customer demographics and behavior.
Payment analytics hold valuable insights that small companies can use to improve the checkout experience and optimize payment routing to unlock revenue and increase e-commerce margins.
Having a dedicated payment platform helps merchants receive payments much faster than normal.
This means merchants can provide a better shopping experience to their customers and also get paid out faster, helping with cash flow.
By optimizing payment routing, merchants provide a faster payment approval process to the customer with fewer false declines (more on this below).
In recent years, global payment solutions have become more accessible to SMBs both in terms of cost as well as the ease of implementation.
PayU’s API for example allows even the smallest merchants to activate global payments in any market around the world through a single point of connection.
With pricing determined based on the size and needs of the business, combined with the potential to increase revenue and profit margins through payment optimization, SMBs can see a clear ROI when it comes to investing in advanced payment capabilities.
Many businesses struggle with the problem of cart abandonment. One reason behind this can be a lack of preferred payment options. When customers don’t find their ideal payment method on the checkout page, they might think twice about making a purchase, or get distracted and leaving things hanging in limbo.
Another common factor when it comes to cart abandonments are slow payment approval times. If a payment takes forever to get approved, or asks for endless additional manual steps from the user, it can add friction and make the user less likely to follow through with their purchase.
Merchants that offer a variety of payment options along with faster and more secure transactions can drive better engagement with customers and improve conversion rates in their online store. By integrating the right payment gateway, any business can take the customer experience to another level.
Auto-onboarding helps merchants to glide through the process of integrating a new online payment solution. This is all thanks to an automated process that counts just a few steps merchants have to follow online.
PayU offers auto-onboarding in select markets and provides other assistance to companies on a per region basis to make the process of getting started as simple and easy as possible.
With clear developer documentation and the support of a dedicated sales engineer, SMBs working with PayU have everything they need to implement a sophisticated global payment platform.
Payment approval rates for e-commerce transactions average around 85% – significantly lower than the 97% average for in-store retail.
This is due to a variety of factors, one of which is the inherent difficulty of verifying identity and preventing payment fraud when a transaction is completed virtually versus face-to-face. As a result, many well-intentioned fraud filters mistakenly flag legitimate transactions as being suspicious or fraudulent. All of this adds yet another layer of friction to the consumer transaction, and results in billions of dollars worth of intended purchases which don’t get completed at all.
Increasing the payment approval rate and cutting down on false declines is one of the most powerful tools in a merchant’s arsenal when it comes to squeezing higher revenues out of e-commerce. Even marginal approval improvements of a few percentage points can result in tens of hundreds of thousands of dollars worth of additional turnover.
One of the most compelling reasons for SMBs to invest in a global payment solution is the capability to increase revenue by optimizing approval rates. With features like Smart Routing, which sends payments through the optimal payment routing configuration to improve approval rates and lower fees, as well as Instant Retry, which can retry a failed payment by sending it via a different provider, any SMB can benefit from the same tools for fighting false declines and boosting approval rates that are available to the largest global businesses.
The digital capabilities small businesses built up during the pandemic – from contactless payments to e-commerce – helped many businesses pivot and survive. Building on this foundation, SMBs are now searching for ways to find new growth and thrive.
An overwhelming 82% of small businesses surveyed by Visa said they plan to accept some form of digital option in 2022, with 73% seeing accepting new forms of payments as fundamental to their business growth. Of small businesses with an online presence, 90% agreed that their survival through the pandemic was due to increased sales efforts via e-commerce and reported that over half of their revenue (52%) came from online channels in the last three months.
With SMBs looking for ways to improve the online customer experience as well as drive more value from e-commerce, implementing a state-of-the-art global payment solution is one key place to start when it comes to driving revenue and creating a more sophisticated online presence.
Get in touch to learn more about how PayU can support your business expansion both locally as well as in growth markets throughout the world.