Payment Enablers Can Get Small Businesses Out of Crisis | Payments Source
As vaccines roll out, small brick-and-mortar businesses are thinking about the future.
For many, reopening and taking over is an opportunity to change or improve how they work. Given the economic devastation caused by the pandemic, it is more important than ever that they operate smoothly and efficiently and get value for money. One of the ways they can do this is by investing in business management software that also provides financial services.
In the $ 200 billion beauty industry, for example, financial technologies (fintech) are changing the way financial products such as payment processing, equity lending, card issuance, credit card processing, and credit card processing. payroll and bank accounts are offered and supported. As an industry particularly affected by mandatory shutdowns, salon and spa owners are stepping up to do whatever they can to help their businesses thrive. With integrated fintech, salons and spas can provide a streamlined shopping experience for their customers, while streamlining their own processes.
In the past, financial services, like point-of-sale systems, were distinct from the platforms that salons and spas used for appointment booking, customer marketing, inventory management, labor management. and reporting. This meant that business owners had to switch between different systems, which could affect both the customer and employee experience, as well as the bottom line. Today, there are SaaS providers who are also fintechs, and there are obvious advantages to this integration.
Reducing the number of suppliers can improve operational efficiency and bring economic benefits, especially for SMEs or mid-size companies that do not have the staff or expertise to navigate the nuances of financial products.
FinTechs add value by offering financial products through the same platform used for business operations with no additional paperwork, phone calls or round trips required. SaaS providers support the sale, support, and service of business payment processing needs by integrating these capabilities into their platform and building internal topics and operational expertise.
SaaS players generally fall into two categories when it comes to offering integrated payments. Most only integrate payments from a technology perspective – the processing relationship is still managed and maintained by a third-party vendor such as a bank, ISO, or processor.
The second category consists of a handful of top players who are not only integrating payment technology into their platforms, but also pricing, support and service for all payment needs. These providers, known as payment facilitators, or payfacs, reinvest the money they earn from processing payments directly into the software platform. This allows payfacs to provide additional features and functions that benefit businesses, rather than contributing to the profits of a third-party payment processor that has no interest in improving the software platform.
One of the main advantages of payfacs is that they strive to leverage data from their customers’ business operations to deliver tailor-made financial products, such as loans or card products. For example, if a salon owner gets pre-approved for a loan that matches their business needs, the repayment could be managed automatically from daily sales and adjusted based on business conditions. Traditional banks cannot offer services with this degree of nuance because they do not have the most recent information on the business conditions of a specific customer. In contrast, payfacs have the unique advantage of knowing and understanding the critical signals continuously emitted by a customer’s business environment.
These capabilities can also extend to issuing credit card products or providing bank accounts. The most successful players are constantly innovating by putting in place the right building blocks so that they can one day meet all of their clients’ financial product needs. Even if a platform does not have all of these capabilities today, the hallmark of a good partner is that they think about the possibilities for the future and take action to achieve that goal.