5 small business tools to help boost sales.

Aug 21 2018 | 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. 

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.

Frequently asked questions.

Fraud tools are used throughout the industry to help fight fraud. The fraud tools listed below are available through PayPal and other fraud management vendors.

Address Verification Service (AVS)
Use AVS to verify if the billing address matches the one that the card issuer has on file. AVS compares the street number and ZIP code entered by the customer with information maintained by the card issuer.

Here's how to set up AVS fraud filter through PayPal:
  1. Log in to your PayPal account.
  2. Go to the Business Profile icon beside "Log out" and select Profile and settings.
  3. Click My Selling Tools.
  4. Click Update next to "Managing Risk and Fraud" in the "Getting paid and managing my risk" section.
  5. Review your AVS settings and if you find it necessary, edit your settings
Card Security Code (CSC)
Ask customers for their CSC. This is the 3 or 4 digit number located on the card that helps confirm they have the card with them. The CSC filter compares the number provided by the customer against the number on file with the issuer. A valid CSC helps verify that your customer has a physical card with them when they place an order. An invalid code could be the result of a customer's typographical error or it could indicate that a fraudster did not have the card with them.

Here's how to set up CSC fraud filter through PayPal:
  1. Log in to your PayPal account.
  2. Go to the Business Profile icon beside "Log out" and select Profile and settings
  3. Click My Selling Tools.
  4. Click Update next to "Managing Risk and Fraud" in the "Getting paid and managing my risk" section.
  5. Review your CSC settings and if you find it necessary, edit your settings
Lookup the card BIN
The first 6 numbers listed on a card is called a Bank Identification Number (BIN). It gives you details about the financial institution that issued the card or card issuer. Use a BIN check service to find out where the card was issued. Be cautious if the billing address country and the card issuer country don’t match. BIN checks are available at www.bin2country.com can be purchased through fraud management companies.

Use IP geolocation tools
IP geolocation is a great way to pinpoint the geographic location of the computers used for the transaction. These tools can help you locate the area of the computer used during online order including the city, state and country. To be proactive about a potential fraudulent transaction, you can check the geolocation details against the billing and shipping address country your customer provided. If the geolocation information doesn’t match, it could be fraud.

You can also use IP geolocation to look for anonymous proxies (a tool that attempts to make online activity untraceable). Orders that originate from anonymous proxies are more suspicious because fraudsters use them to hide their location. However, legitimate customers who value privacy could also use anonymous proxies to protect their information, so this might not be an example of fraud in all instances.
  • What can I do if the IP geolocation information does not match the billing or shipping address?
    • Resolve the discrepancy.by contacting the customer or by following other steps listed under step 3 below.
Device Identification
Device Identification tools can be used to help identify the computer or phone that placed the order. Each computer or phone has unique characteristics and this tool can determine if a buyer is repeatedly visiting your site using different information (names, addresses, IPs, credit cards, computer browsers, etc.) to mask their identity. You can search online for a list of third party vendors providing this service.

Here’s how to access the MultiOrder Shipping tool from your Business account.
  1. Click Tools.
  2. Click MultiOrder Shipping. Click the heart icon to add MultiOrder Shipping to your favorite tools.
 MultiOrder Shipping
MultiOrder Shipping

Here's how to view and update personal information, such as mailing address, email address, phone number, social security number, language, password, security questions, security key:

  1. Go to your Profile and settings.
  2. Select either My business info, My settings or My selling tools and follow the steps provided.

Here's how to view and update your financial information, such as bank accounts, debit and credit cards, currencies, automatic payments:

  1. Go to your Profile and settings.
  2. Select My money.
  3. Select a specific section and follow the steps provided.

Need more help? Here are some common questions about updating your profile:

How do I change the name on my PayPal account?
How do I change my password and security questions?
How do I change my email address?
How do I confirm my bank account?
How do I add, change, or remove a street address?
How do I confirm my mobile number?
How do I edit the billing address linked to my card?
How do I add my mobile number to my PayPal account?
How do I add or change a phone number on my PayPal account?
PayPal is an online payment service that enables businesses of all sizes, as well as individuals, to accept bank or card payments for the items they sell. When a customer pays for his or her purchases, PayPal processes the payment and transfers the funds to the seller’s PayPal account. PayPal also offers a start-to-finish shopping cart and checkout system.

With PayPal, you can:
  • Accept all types of payments, on almost any device. We’re built to help you accept cards, PayPal, PayPal Credit, and the latest digital wallets via your phone, tablet, laptop, or storefront – in 203 markets around the globe.
  • Use our fastest, easiest checkout yet. Create a better buying experience with fewer screens and fewer clicks. Plus, customers choosing to pay with PayPal have a 44% higher checkout conversion than those using credit cards.
  • Get credit for your business in minutes. You may be eligible to apply for a PayPal Working Capital business loan, giving you better cash flow with no credit check.
  • Offer credit to your customers too. Help increase your online sales by giving your customers the flexibility to pay for purchases over time with PayPal Credit. Even though your customers get more time to pay, you still get paid in full upfront.
  • Get set up quickly, plus get help from our live support when you need it. Integrating payments into your business is easy, and we’ll give you the help you need – from a real human.
PayPal facilitates online payments for hundreds of thousands of Internet e-commerce ventures, as well as traditional brick-and-mortar businesses that have an online presence.

See how PayPal works and get started: