Many small and medium-sized businesses (SMBs) have struggled as a result of the pandemic and its economic ramifications. The pandemic crushed demand, disrupted supply chains, and altered consumer habits, forcing many small and medium-sized businesses to innovate in order to adapt to the “new normal” and survive. Many businesses have reconfigured their product and service offerings to update payment channels and take other digital approaches as a result of a focus on digital transformation. Businesses needed to reinvent themselves faster than ever before. The big question is how they did it and how they are reimagining the future.
Smart checkouts and delivery
The shift in consumer preferences towards online shopping, fast forwarded due to the pandemic, has led businesses to migrate their businesses from offline to online. That said, friction in the checkout process with a lack of desirable payment options has significantly contributed to the rate of cart abandonment. Hence, in order to drive customer loyalty, SMBs need to address the pain points of payment processes by showcasing several payment alternatives sooner in the checkout process.
Having a seamless shopping experience that includes card payments and alternative payment methods such as card on delivery, digital wallets Unified Payments Interface (UPI), and EMI (Equated Monthly Installment) can drastically change the consumer experience and further boost the merchants’ business. Shipping is a key factor in customer satisfaction, merchants also need to keep up with the fast-evolving customer expectations by providing fast and quick deliveries. ‘Time is money’ becomes more relevant in today’s business landscape with the increase in demand to get orders on time.
Adoption of digital payments
The revolution in digital payments has been a major step in helping SMBs. The initiatives taken by the regulator to promote the use of electronic payment methods aided not only in creating awareness around the benefits of these methods, but they have also made payment technology more accessible and affordable for businesses. Advancements in payment technology have led to an array of digital payment solutions such as contactless card acceptance and instalment payments to enhance sales and day-to-day operations. Additionally, innovation in m-commerce and e-commerce has helped merchants connect to the digital economy, even in remote and inaccessible corners of India.
The above factors, coupled with changing consumer shopping and payment habits, have led SMBs to turn to digital payment solutions, which provide benefits such as enhanced cash flow management with instant settlement and faster processing time.
Access to credit
The growth of SMBs is often impeded due to the lack of secure credit. Traditional lending has required a certain set of collaterals that at times has deterred small businesses. Loan Against Card Receivables (LACR), an innovative credit solution in which repayment is deducted from daily card spending at the merchant establishment has been a well-accepted innovation by the merchant community. Other than providing access to financing, a lot of innovation has been introduced to facilitate better inventory and cash flow management, reconciliation and reporting tools, thereby giving businesses seamless tools to run and manage their business more efficiently.
Banking the unbanked
Newer technology and payments solutions in the market allow consumers to leverage alternate payments methods, which further support a large network of small entrepreneurs. With financial services providers banking the unbanked population, finding innovative ways to lend to and support them, and allowing people with basic financial literacy to save and invest, there are now more opportunities available for small business owners to get their business ahead.
Although the pandemic posed many difficulties, it also taught small businesses how to embrace technology and prepare for the future. When it comes to managing digital change amid revenue reckoning, they now have the tools they need to flourish in the post-pandemic business world. SMBs will once again start the engine humming to become more resilient and strengthen their foundations with a proactive approach and a little bit of readiness.
Rishi Chhabra, Country Head and General Manager, India and Sri Lanka, Fiserv