Small and medium-sized businesses (SMBs) represent one of the most vital components of the economy, contributing to global growth, innovation and employment. However, unlike large enterprises, SMBs often drive those contributions with limited personnel and financial resources.

Studies show that although small businesses comprise 99.9% of all companies in the United States, 81% are owner-operated with no employees.

Limited size and resources often translate into roadblocks, especially when striving to meet modern consumers’ diverse (and often demanding) needs. The challenge for payment providers, then, is finding ways to serve the unique needs of this all-important sector of the market so that they can thrive and grow despite their limited resources.

To do that, payment providers need a focused understanding of the unique requirements of SMB merchants and a tailored approach to serve and support them. Below, we delve into some of the areas that set SMB merchants apart from their larger counterparts and illustrate why, in this case, size can make all the difference.

What Are the Differences Between SMB Merchants and Larger Ones?

SMB merchants and larger enterprises operate in the same markets but under strikingly different circumstances. One of the most apparent differences is their scale of operations. While large enterprises aren’t necessarily known for their speed, their scale gives them easy access to capital that small businesses don’t have. In the game of market growth, that money is an advantage.

SMB merchants, on the other hand, typically work with minimal time, money and personnel. It’s also more difficult for them to raise capital to finance growth or safeguard against economic uncertainty. These constraints require SMBs to be far more agile and adaptable, and they expect the same qualities from their payment partners.

The needs and priorities of SMBs, especially concerning payment processing, are distinctly shaped by the limitations they work with. While larger businesses may prioritize large-scale, custom solutions, SMBs lean towards affordability, ease of use, efficiency and flexible scalability.

These fundamental differences necessitate a different approach from payment providers. Recognizing the unique characteristics and requirements of SMB merchants compared to larger ones is the first step in tailoring offerings that align with their needs and enhancing the merchant experience.

What Do SMB Merchants Need to Be Successful?

Success for small and medium-sized merchants often hinges on their ability to find great partners that can offer solutions to help them flourish without requiring extensive or expensive customization. Some of those needs include:

Simple, Easy-to-Use Tools

Complexity can be a barrier for SMBs because they don’t have the time or resources to train staff on complex systems. As a result, they need tools that are intuitive and user-friendly. Payment solutions must be straightforward to implement and use to allow merchants to focus on their core business and help their end customers without being bogged down by technical intricacies.

Affordable Options

Most SMBs have to work within tight budgets, and transaction fees can be a considerable pain point. Small businesses need payment solutions that offer the best possible value without compromising essential features. This means payment providers must provide a variety of processing services and value-added features that can be tailored to a merchant’s volume and operations.

Flexible Customization

SMB merchants need payment solutions that offer flexible customization options. Because most small businesses work with limited funding, they need a solution that will grow with them as they expand their services and operations. Instead of opting for an expensive, out-of-the-box solution, SMBs need flexible options that easily align with their goals and budget.

Omnichannel Payment Functionality

SMB merchants must be able to accept payments when and where they want – or, more accurately, when and where their customers want. Merchants need a flexible omnichannel payments system that caters to various payment methods and currencies. This functionality will enable merchants to quickly and easily adopt new payment methods like ecommerce and mobile payments as their business grows and their customers evolve.

Customer Support

Small businesses often run on razor-thin margins, making any interruption to their operation a potential crisis. If something isn’t working or an SMB merchant needs help, there is no room for slow or ineffective support. Personalized and responsive customer service makes a meaningful difference in the quality of a merchant’s experience and their ability to feel secure with a processing partner.

Frictionless Security and Compliance

When a big company suffers a data breach, it dips into its reserves, pays the fines and moves forward as usual. For small businesses, it’s a different story. The average data breach now costs well over $4 million, meaning security incidents can devastate SMBs.

Payment security and fraud prevention are complex. Unfortunately, few small businesses can spare the necessary resources to handle them directly. That means payment services targeted at SMBs must offer air-tight and easy-to-access security features that establish trust between the merchant and processor and the merchant and end-customer.

How Can Payments Providers Enhance the SMB Merchant Experience?

SMB merchants have unique needs. What features and services should you offer to enhance their experience?

From automated onboarding and modular commerce options to advanced third-party security and beyond, it’s easier than ever for payment providers to offer merchants everything they need in a single streamlined, affordable package.

Web-Based Signup and Automated Onboarding

An improved merchant experience starts from initial signup. To compete with the likes of PayPal and Square, you must offer merchants fast, frictionless, web-based registration options that don’t take days (or weeks) to complete.

For processors, that means moving merchant applications online and embracing digital onboarding and underwriting tools. With the help of advanced automation, you can reduce approval from days or weeks to hours. Some solutions can even cut onboarding and underwriting to a matter of minutes.

Integrated Omnichannel Payment Solutions

Offering simple credit card processing used to be enough for most merchants. However, customer expectations are changing; today’s merchants must be able to take payments in-store, on the web and via mobile devices. They must also have the option to adopt new rails like text-to-pay.

To meet these needs, look for processing partners with complete, one-stop omnichannel payment capabilities. This will allow merchants to sell wherever needed and expand into new channels as their business grows without taking on new systems or partners.

Modular Flexibility

For SMB merchants, one-size-fits-all solutions aren’t enough. Modern payment offerings must be modular so they can easily pick and choose what they need depending on their size, resources and required functionality. That modular flexibility ensures small merchants with unique needs aren’t shoehorned into large, sweeping systems designed to cater to larger companies.

To cater to SMB merchants effectively, you must provide a variety of processing options and value-added services. Allowing merchants to opt in or out of value-added services as needed will make it easier for them to enhance areas like advanced security, data management, accounting and more.

Customer-First Payments Tech

Consumer payment habits have shifted. In an increasingly digital landscape, providers must design solutions that will meet the expectations of young, tech-savvy shoppers. From great online payment gateways and in-store hardware options to mobile terminals and beyond, the more a payment provider can do to ensure each end customer’s checkout and payment process is as frictionless as possible, the more valuable a partner they’ll be.

Partner with NMI to Gain Turnkey Access to the Ultimate in Small Merchant Solutions

Small and medium-sized businesses have widely varying needs. This makes it difficult for payment providers like independent sales organizations (ISOs), payment facilitators (PayFacs) and independent software vendors (ISVs) to offer solutions that have enough flexibility to serve the SMB market as a whole.

Thankfully, we can help. NMI’s payment platform offers providers a modular set of services, including:

  • An industry-best gateway with access to over 200 payment processors
  • Omnichannel payment capabilities covering in-store, ecommerce, mobile and unattended payment channels
  • A full menu of affordable, value-added services, including advanced security, fraud protection, Level 3 data collection, accounting integrations and much more
  • Lightning-fast online signups with automated onboarding and underwriting capabilities
  • Transparent and easy-to-understand billing
  • Unparalleled flexibility and scalability, ensuring providers are ready to serve evolving needs as merchants grow
  • Industry-best support to ensure providers and their merchants enjoy the most frictionless and uninterrupted experience possible

To learn more about how our modular payment platform can provide you with turnkey access to everything you need to help SMB merchants succeed, reach out to a member of our team.

Don’t just turn on payments, transform the way you do business

  • Generate New Revenue By adding or expanding payment offerings to your solution, you can start earning higher monthly and transaction-based recurring revenue.
  • Offer the Power of Choice Allow merchants to choose from 125+ shopping cart integrations and 200+ processor options to streamline their onboarding.
  • Seamless White Labeling Make the platform an extension of your brand by adding your logo, colors and customizing your URL.

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