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.

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:

 

Charities can use PayPal to collect donations and can receive a discounted rate.

How does PayPal confirm charities and nonprofit organizations?

To get the discounted charity rate for your organization, we need to confirm your charity account.

You can begin the confirmation process at www.paypal.com/charities. You will need to provide information to prove that:

  • Your organization is legally registered with the appropriate regulatory body
  • You are a representative of that organization

How can my charity or nonprofit use PayPal to collect donations?

The PayPal donation button is a convenient and cost-effective solution for collecting donations online.  Follow our step-by-step guide to create a Donate button. Define the donation amounts you want to accept or create an open field for customers to fill in; no programming is required.

To receive recurring donations simply set up a Donate button and integrate it to your site. View our PayPal Developer page to see the current Donate experience.

When donors click your donate button, they complete their donation on the PayPal site. There are no monthly or set-up fees with donation button transactions. Your organization only pays processing fees when they receive a donation.

Other features:

  • Customers can choose to automatically give a monthly donation to your organization.  Both the organization and the customer can control the recurring payments in their respective profile settings if they would like to cancel or change the amount.
  • Donate button is automatically mobile optimized for easier payments on small devices.


Visit our PayPal Nonprofits site to learn about all of the tools PayPal provides to help nonprofits raise funds.

Offers that sound too good to be true, probably are
Most of us are careful if a stranger approaches on the street and offers a deal that's just too good to be true. But we're much less cautious online, putting us at risk.

Advance fee fraud
If you get an offer for free money, there's probably a catch. Typically, fraudsters will ask you to send some smaller amount (for taxes, for legal documents, etc.) before they can send you the millions you’re promised, but which they never intend to send you.

How to avoid this scam: Don't wire money to someone you don't know.

Overpayment scam
  • A customer sends a PayPal payment that is more than the purchase price of the order, and then asks you to wire them the difference.
    • They may tell you that they accidentally overpaid you, the extra money is for the shipping costs, they're giving you a bonus for your great service or the money is for the stress they've caused you.
    • They may even ask you to wire the shipping fees to their shipper.
  • This scammer may have paid with a stolen credit card, bank account number or checking account.
    • Just because a payment has been deposited into your account, doesn't mean the money is yours to keep. If the legitimate account holder reports unauthorized activity, the money can be withdrawn from your account.
    • If that happens, you'll lose the money you wired to the fraudster, the product you shipped, shipping costs and your payment.
How to avoid this scam:
  • Don't wire money to someone you don't know. A legitimate buyer won't overpay you for an order.
  • If a customer overpays you and asks you to wire them the difference, consider canceling the order—it's very likely to be fraudulent.
  • Don't wire money to the bogus shipping company—it's part of their scam to get your money.

Prize winnings
Messages asking you to pay a small handling fee to collect some fabulous prize are usually a scam. You send the handling fee and get nothing in return.

How to avoid this scam: Don't send money to someone you don't know. A legitimate prize won’t require you to pay in order to receive it.

High profit – no risk investments
These types of investments are usually scams and include messages insisting that you “Act Now!” for a great deal.

How to avoid this scam: Discontinue communication with this person/company.

Fake charities
Scammers use disasters to trick kind-hearted people into donating to fake charities. This usually happens when there is a refugee crisis, a terrorist attack or a natural disaster (like an earthquake, flooding or famine).

How to avoid this scam:
Thoroughly check the background of any charity to make sure your donation goes to real victims. Use resources to check out charities, like the ones below:

http://www.charitynavigator.org
http://www.bbb.org/us/charity
http://www.charitywatch.org

If a charity does not have a website, be cautious.

To learn more about common scams and how to avoid them, search online for advance fee fraud. You can also read the FBI's material on common types of scams. Most importantly: be as cautious online as you would be in the real world.

Shipping Scams
There are several ways fraudsters incorporate shipping into their schemes. Be sure you’re familiar with the following:
  • My shipping service scam
    • The buyer asks you to use their shipping account because they can get a discount, they have a preferred vendor they’ve worked with for years, or their shipping service is cheaper or more reliable. In another variation of the scam, the buyer may also ask you to wire the shipping fees to their preferred shipper.
    • If you use the buyer's shipping account, they can easily contact the shipping company and reroute the order to another address.
      • The buyer can then open up a complaint asking for a refund because they didn't receive their order.
      • You aren't able to prove that the buyer received their order and you are out your product, the shipping costs and your money.
    • If they ask you to wire the money to a bogus shipping company, they can steal your money.
      • After you have wired the money you’ll find out that the order was made with a stolen card or bank account. You may be held liable for returning the funds to the legitimate customer whose account was stolen.
How to avoid this scam:
  • Only use your shipping account.
  • Never wire money to someone you don't know – you can't get it back easily.
  • If a customer asks you to use their shipping service, review their order for fraud carefully. They may have used a stolen card or bank account to fund the purchase.
  • Ship to the address on the Transaction Details page.
Pre-paid shipping label scam
  • You receive an order from a customer who asks you to use their pre-paid label to cover the shipping charges. (They may tell you that they can get their labels at a discounted price.)
  • By providing the label, the customer controls the destination of the package. They may send it to another country, a PO Box or some other untraceable location.
    • To be covered under PayPal's Seller Protection policy, you are required to ship to the address on the Transaction Details page.
    • The shipping label may also have been purchased with a stolen credit card.
How to avoid this scam:
  • If the customer asks you to use their pre-paid label, review their order for fraud carefully. They may have used a stolen card to make the purchase.
  • Do not accept shipping labels from your customers.
  • Ship to the address on the Transaction Details page.
Package rerouting scam
The buyer reroutes the package so they can file a complaint that they never received it.
  • A buyer places an order and provides an incorrect or fake shipping address.
  • The shipping company tries to deliver the package but isn't able to.
  • The buyer monitors the online tracking information and notices that the shipper couldn't deliver the package.
  • The buyer contacts your shipping company and asks them to send the package to their correct address. The shipping company delivers the package to the new location.
  • Buyer then files a complaint for not receiving the item.
    • Because the shipment was rerouted, you can't prove the item was delivered to the address on the Transaction Details page.
    • The buyer gets to keep the item and money.
    • Because the package wasn't delivered to the address on the Transaction Details page, you aren't covered by Seller Protection.
    • Unfortunately, you lost the product, shipping fees and the money.
    • To make it worse, you might also have to pay your shipper an additional rerouting fee.
How to avoid this scam:
  • Contact your shipping company and block buyers from rerouting packages.
  • Validate the buyer's address before shipping.
  • Only ship to the address on the Transaction Details page.

Business / job opportunities
Fraudsters will post fake job opportunities on job-posting sites, dating sites, and via spam email.

Reshipping packages scam
  • One of the more popular work-from-home scams is reshipping electronics, clothing and other items out of the United States.
  • You receive items (electronics, jewelry, clothing, etc.) in the mail and are asked to ship them out of the country.
    • Packages may be addressed to someone else's name (the stolen credit card victim).
    • Your "employer" provides you with a shipping label (also paid for with a stolen credit card).
    • Your "employer" ask you for personal information, such as Social Security Number and bank account details, so they can "direct deposit" your check.
    • Generally, you’ll never get paid and have just exposed yourself to fraud.
  • Most merchants will not ship items out of the country.
    • Fraudsters need you to act as an intermediary to help get the goods out of the country. It also helps them avoid getting caught.
    • They use your personal information to steal your identity or takeover your account.
How to avoid this scam:
  • If it's too good to be true, it probably is. Know who you are dealing with and don't reship packages.
  • If you didn't realize you were involved in a scam until the packages started arriving, refuse delivery or return to sender. Report scams to the Internet Crime Complaint Center or contact your Postmaster.
  • Never give your private personal or financial information to anyone you don't know.
Employment scam
  • Someone contacts you about a great new business opportunity. They need an employee or partner to sell cameras (or some other expensive product) for them.
  • Scammers trick innocent and trustworthy people into sending them money and merchandise.
    • The scammer may even say they found you through eBay's Trading Assistant program. They will ask you to:
  • List some products for sale on eBay or on your website.
  • Use the money from the orders to pay their supplier. They’ll contact the supplier in advance to let them know you’ll be sending them money.
  • Update your PayPal account address to their address. They’ll usually give you an address that looks like a regular address but it's a P.O. Box.
  • After you pay the supplier, you’ll start receiving complaints from your buyers stating that they didn't receive their merchandise. Instead they received an empty box (from the scammer).
  • You contact the supplier. They inform you that your partner said you would be sending money for gold bouillons, so they shipped the gold bouillons (not cameras) to your PayPal account address. You remember that your partner asked you to change your PayPal account address to their address, so they could pickup the gold.
    • You paid the supplier for the cameras, so you file a complaint against the supplier. Unfortunately, you learn that you may be liable for the money since the supplier delivered the merchandise to your PayPal account address.
How to avoid this scam:
  • If it's too good to be true, it probably is. Know who you are dealing with.
  • Don't list someone else's address on your PayPal account.
  • Verify your suppliers and don't send money to someone you don't know.
  • Only ship items to the address on the Transaction Details page.
  • Be on alert if you’re asked to ship a lot of packages overseas or to the same post office box.
If you think you’ve received a suspicious email or have been directed to a fake website, forward it to spoof@paypal.com and we’ll investigate it for you. After you send us the email, delete it from your inbox. If you clicked on any links or downloaded any attachments within the suspicious email or website, log into your account and view your transactions. It’s also a good idea to change your password.
 
To report SPAM SMS messages, forward them to ‘7726’ (which is the keys for SPAM on most phones). Check with your service provider to find if this service is supported or read more here: http://www.gsma.com/aboutus/.  
 
To view all transactions and activity, log in to your PayPal account and check your recent activity. If you see any unauthorized transactions, go to the Resolution Center to report it.

Here's a video on identifying suspicious mails:
 
Virtual Terminal is bundled with our customizable payment solution, PayPal Payments Pro. Virtual Terminal allows merchants to accept payments virtually anywhere they have Internet access, with no card swipe or software to install, and is ideal for merchants who receive orders by phone, fax, or face to face.

Virtual Terminal has these features and benefits:
  • Grow your business – Process payments for major credit and debit cards. Extend your reach to customers who prefer not to pay online, including customers without a PayPal account.
  • Process payments anywhere – Process payments anywhere through any device with an Internet connection and a web browser.
  • Zero setup – Virtual Terminal requires no coding or specific software installation to get started.
  • Use PayPal as a one-stop payment solution and more – Process your customers' orders through a PayPal-hosted online payment form along with a set of tools for intuitive reporting; printing shipping labels and packing slips; and printing or emailing transaction receipts.
  • Process multiple payments simultaneously – You can launch multiple Virtual Terminal instances to process payments, as in the case of a call center or during heavy demand.

Note: PayPal's Seller Protection Policy doesn't apply to transactions processed using Virtual Terminal.

Here’s how it works:
  1. Log in to Virtual Terminal. When you're ready to process a payment, go to Tools, click Get paid and then Virtual Terminal.
  2. Enter the order. Enter the order details and credit or debit card information. If you're mailing an item, include the shipping information.
  3. Complete the transaction. You'll receive a confirmation for successful transactions. You'll then have the option to print a receipt or packing slip, email the receipt to your customer, or process another payment.
  4. Get paid. Once approved, the money shows up in your PayPal account, usually within minutes. From there, transfer it to your bank account, spend it wherever PayPal is accepted, or use your PayPal Business Debit Mastercard® at the ATM or in stores. You have fast access to your PayPal account, plus the PayPal Business Debit Mastercard offers 1 percent cash back on eligible purchases (It requires enrollment. Cashback applies to signed transactions only.)

Virtual Terminal costs $30/month USD, with no setup, termination, or withdrawal fees. Per-transaction fees of 3.1 percent + $0.30 apply.

See pricing details

If you encounter any issues when signing up or processing payments, reach out to Merchant Technical Support.

See also:
What must I do to start using Virtual Terminal?
How do I enter and process transactions in Virtual Terminal?