5 small business tools to help boost sales.

May 31 2019 | Contributing writer, Mercator Advisory Group

Local retailers face an uphill battle when competing against national brands.
They simply don’t have the budget that the big guys do to spend on best-in-class marketing and business technology. But in the last couple of years, many companies have started developing technology for small retailers that was once only available to large chains. 
 
Innovation in consumer financing technologies, payment card acceptance, e-commerce fraud prevention, and loyalty marketing services, is helping small businesses take on their larger competitors.
 
1. Offering consumer financing can help increase sales.
Consumer financing is an often underutilized tool for generating sales. But new consumer financing products are making it an option for more retailers. Consumers may buy more when they can pay over time. Large retailers, especially the ones selling “big ticket” items like refrigerators, washing machines, and home theater systems, use this element of consumer behavior to their advantage. They can often afford to offer financing promotions, or they can partner with banks to issue their own store-branded credit cards. And consumers have become more aware of the interest rates they’re paying on their credit cards. 
 
Small businesses — from retailers to service-based businesses — are usually unable to offer consumer financing on their own because they don’t have enough cash to make loans to their customers, and credit card programs can be too expensive and demanding to manage. 
 
Fortunately, the tables are turning. For example, PayPal Credithelps online sellers present a
financing option to their customers. It doesn’t cost you anything extra, and it gives your shoppers greater buying power. 
 
2. Mobile point-of-sale devices open small businesses to card sales.
Until recently, the ability to accept credit and debit cards was not available to all businesses. Some small businesses don’t have enough sales or a long enough history to qualify for a business account. In addition, many small businesses have struggled to justify the cost of card acceptance, even when it’s an option. The cost to purchase a point-of sale-terminal and the recurring monthly account fees can add up quickly. 
 
But companies like PayPal are turning their attention to creating mobile card readers and apps that make accepting payments affordable for small businesses. Mobile card readers are devices that business owners and store employees can plug into their smartphones and tablets to swipe customers’ cards. They’re simpler and much less expensive than large point-of-sale (POS) terminals, and even support accepting checks and cash like their POS brethren. Plus, the companies that provide them often charge more predictable fees than some merchant services providers. Moving beyond simple card acceptance, these providers are working to popularize consumer payment apps that work with their mobile card readers. For example, with the
PayPal mobile app, a consumer can walk into any business that accepts PayPal and pay by “checking-in,” without having to swipe a credit card.
 
The development of these technologies is a great benefit to retailers because it enables them to offer customers the much appreciated, and often expected, convenience of broader and faster payment acceptance.
 
3. Loyalty programs can help drive new business and strengthen your customer relationships.
Some of the companies that provide the most economical credit card acceptance services combine them with automated loyalty programs. For instance, some providers have developed a tablet-based card acceptance solution that also tracks and applies the retailer’s discounts when consumers make a purchase.
 
Other companies focus entirely on providing loyalty services to small businesses. In general, these solutions are pretty versatile. Retailers can use them to help attract new customers, turn occasional customers into loyal customers, and keep their loyal customers satisfied. 
 
The power of each of these solutions comes from their ability to track offer redemptions to unique customers. This helps retailers get to know their customers better, and allows them to evaluate the effectiveness of their promotions. All retailers want to reward their most loyal customers, and now small businesses have access to technology that can help them manage customer data on an individual basis.
 
4. Combating fraud to limit e-commerce risks.
Fraud is another concern for retailers, especially those selling products online. The Internet connects small businesses to customers around the world, but the anonymity creates opportunity for abuse. National retailers spend hundreds of thousands, if not millions, of dollars every year on technology that helps them detect when a potential customer is using a stolen credit card or is part of an organized crime ring. 
 
The risk is perhaps even greater for small businesses. 
Accepting even one fraudulent order can put you out of business if it’s large enough. Local retailers shouldn’t experiment with e-commerce without first looking into the number of applications that can help them manage the risk.
 
As consumers have embraced online shopping, more businesses are venturing into cyberspace. Fortunately, many e-commerce companies that service small- and medium-sized businesses either sell fraud detection software or provide fraud services as a component of their offering. 
 
For instance, PayPal offers solutions that filter transactions through a variety of screening criteria to help prevent fraud. Both companies give users the flexibility to customize the filters to target specific threats to the business. Also included is the ability to check for things like discrepancies between the customers IP address and shipping address, the Card Code Verification (CVV) number (the three or four-digit security code on a credit card), and when several orders are submitted in rapid succession. Online retailers that use these tools stand a much better chance against fraudster’s attacks than those that go it alone.
 
5. Data-driven marketing solutions can also offer great potential for growing your business.
For example, with PayPal Marketing Solutions, you can get unique insights about the shopping behaviors of your customers, and then use those insights to improve their shopping experience. 

 

 
Conclusion.
The battle between local and national retailers might never be a fair fight, but there are several ways that smaller businesses can use technology to become more competitive. Consumer financing, card acceptance, loyalty services, and fraud detection technology are becoming accessible to retailers of all sizes for the first time. Not every new technology makes sense for every business, but these innovations are so central to retail operations that business owners should consider them carefully. New card acceptance and fraud prevention technologies both help businesses contain costs, while loyalty and consumer financing services help drive revenue. Smaller retailers that take advantage of both kinds of technology greatly improve their chances of successfully taking on their national competitors.


About Mercator Advisory Group
Mercator Advisory Group is the leading, independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world's largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors. Mercator Advisory Group is also the publisher of the online payments and banking news and information portal PaymentsJournal.com.

 
The contents of this site are provided for informational purposes only. You should always obtain independent, professional accounting, financial, and legal advice before making any business decision.

1Customers get No Interest if paid in full in 6 months on purchases of $99 or more. Customers must check out with PayPal and use PayPal Credit. PayPal Credit is subject to consumer credit approval.

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Frequently asked questions.

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Here’s how to link a bank account to your PayPal account:
  1. Click the Pay & Get Paid tab at the top of the page.
  2. Click Banks and Cards.
  3. Click Link a new bank.
  4. Select your bank, or click Don't see your bank? at the bottom.
  5. Depending on the bank you select, you may have the option to link your bank instantly using your online banking login information. If the instant option isn't available, just enter your bank account details manually and click Agree and Link.

Option 1: Link a bank account instantly
To link your bank account instantly, you'll need to enter your user ID and password for your online banking. We'll match this information with your bank to confirm your account ownership. Once this information is entered correctly, your bank account will be confirmed instantly.


Option 2: Link and confirm a bank account manually
If you enter your bank account number manually, you'll be prompted to confirm this bank account. You must complete this step before you can use your bank account to make payments or add money to your PayPal account.

Within 3 business days, review your bank statement to find 2 small deposits (each between $0.01 and $0.99 USD) that we sent to your bank account. You can also contact your bank to find out the exact amounts of these deposits. After you find out the amounts of these deposit, here's how to complete the confirmation process online:
  1. Click the Pay & Get Paid tab at the top of the page.
  2. Click Banks and Cards.
  3. Click the bank account you want to confirm, and click Confirm.
  4. Enter the exact amounts of the 2 deposits made to your account. For example, if you receive two deposits of $.05 and $.15, enter .05 and .15 on the screen.
  5. Click Submit.
View this video for steps on adding a bank account to your PayPal Business account.

Note:
  • Some banks combine the 2 small deposit amounts into 1 lump sum. In this situation, please contact us to confirm your bank or try to link your bank instantly.
  • The small deposits are temporary and will be removed from your bank account. If the deposits are $.05 and $.15, you'll also see a debit of $.20 by PayPal on your bank statement.
  • Click here for common issues you might encounter when linking a bank account.

Learn how to link a debit or credit card to your PayPal account.
You need to confirm your bank account so you can move money into your PayPal account. With a confirmed bank account, you are able to withdraw money to a bank account or a debit card, pay anyone with a debit/credit card, and receive money.

Here’s how to initiate the confirmation:
  1. Click the Pay & Get Paid tab at the top of the page.
  2. Under 'Wallet', click Banks and Cards.
  3. Click the bank account to confirm.
  4. Click Confirm.
We’ll send 2 small deposits (each between $0.01 and $0.99 USD) to the bank account you want to confirm.

After 2 to 3 business days, review your bank statement or contact your bank to find out the exact amounts of these deposits. With this information, you can complete the confirmation process online.

Here’s how to complete the confirmation process online:
  1. Click the Pay & Get Paid tab at the top of the page.
  2. Under 'Wallet', click Banks and Cards.
  3. Click the bank account to confirm, and click Confirm.
  4. Enter the exact amounts of the 2 deposits made to your account, then click Confirm.
Note: These random deposits are temporary and will eventually be debited from your bank account. If you don't see them in your bank statement, go to your Money page and PayPal will resend them to you.
Here’s how to access the MultiOrder Shipping tool from your Business account.
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  2. Click View All next to 'Streamline Operations'.
  3. Click the Shipping labels tile, then Get Started.
  

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