Access to Online Payment Tools More Important Than Ever for Small Business

Almost overnight, The COVID-19 pandemic upended small businesses across the country and left many ill-equipped for an unprecedented crisis. Even in strong economic times, running a business is no easy feat. Profit margins are often slim, and any disruption to the business can have a dramatic impact on cash flow.

When social distancing measures were put in place asking people to stay at home, business owners were faced with an immense challenge. How do you continue operating and keep payments flowing when you cannot open your doors to the public? Suddenly, having an online presence and alternative ways to accept payments online went from being a “nice to have” business tool to a “must-have” business tool.  

For businesses with an established online presence, and the ability to accept payments remotely, the transition was much easier. Whether they were using popular card-not-present payment tools like a virtual terminal or online invoicing, they had immediate access to tools that allowed them to keep commerce flowing. This made it easier to communicate their contingency plans to their customers right away and then focus on directing them to their online sales channels. If a business did not have an online presence and was only able to accept payments with a traditional terminal, their options proved to be limited.

Business owners without an online presence, many of whom may not necessarily consider themselves to be “tech-savvy” in the first place, were left scrambling to find the fastest way to set up an online store and fundamentally alter how they accepted payments. For many of these businesses, this experience included the frustrating realization that if they relied on a more traditional payment solution to accept payments, their options for online payments were limited or nonexistent. In most cases, the widely-adopted bank payment processors don’t offer omnichannel solutions and haven’t invested in any meaningful way in modern software tools for online payments. So instead of helping their partner merchants, the shortcomings of these traditional bank processors ended up hurting them and further exposed the vulnerabilities of unprepared businesses in a world that is moving faster than it ever has away from in-person payments and toward ecommerce.

If a business lacked the ability to send online invoices or easily set up an online store because their payments solution was disproportionately focused on in-person payments, that business now had to look elsewhere and create new accounts - and spend more money - on platforms they had never used before. Had their payment provider already offered the tools they needed, businesses could have spent their time promoting their online sales channels and adjusting their offerings. Instead, they had to invest valuable time in researching, selecting, signing up with, and creating new accounts with providers who offered the forward-looking online tools they needed.

Business owners are tenacious, creative people, and they got it done. However, the transition was significantly easier for the businesses that had partnered with a payment provider who offered flexible payment solutions for both in-person and online payments before COVID impacted their operations. We saw firsthand at Helcim how our merchants quickly pivoted to prioritize using our collection of online payment tools that have always been readily available to them with their account. The chart below shows the steady increase in online store usage we at Helcim noticed from our merchants during the peak of the COVID-19 pandemic. In April 2020, we launched an Online Food Ordering tool specifically to assist restaurants and those in the food and beverage industry, resulting in a 189% uptick in online store usage between April and May.

Adding an online store and ecommerce sales is an easy win for businesses looking for alternate ways to reach customers. In addition to the standard shipping options, there was an influx of businesses offering contactless pickup and home delivery options to entice local customers to open their wallets and support businesses in their communities.

Payment processing trends from Helcim merchants showed that businesses using online payment tools had up to a 30% increase in payment processing in April compared to their March processing volumes. April also included an upward trend for online payments overall as in-person sales simply shifted to a business’s online sales channels, instead of disappearing altogether.

Other online and virtual payment tools that businesses utilized to continue accepting payments included using a Virtual Terminal to accept payments from customers over the phone, Online Invoicing to request payments through email, and Hosted Payment Pages for collecting one-off donations or set payment amounts. Businesses that have access to multiple online payment tools can provide flexibility to their customers while abiding by social distancing requirements.

Some business owners observed that their goals for online customer adoption were accelerated by 10 years in the last few months alone, demonstrating that this trend is likely here to stay. As many cities move into different phases of reopening and in-person purchases slowly start resuming, having a safety net of online tools to fall back on if another crisis hits should provide business owners with peace of mind.

The COVID-19 pandemic reinforced the value that having multiple sales channels provides businesses of all sizes, with many business owners learning first-hand the importance of partnering with a payment processor who provides both a great core payment offering as well as modern online software tools. Don’t be surprised if you see some traditional processors scramble to pursue partnerships in order to provide basic versions of such tools, but it will likely still be a separate, tacked-on solution and it may still come at the expense of the merchant.

The way the stock markets are favoring technology stocks over banks right now is indicative of what the future of commerce looks like, and it’s not with bulky, traditional terminals sitting next to a cash register. As businesses reopen their doors to the public, they will be reflecting on lessons learned during the pandemic and looking for the best way to protect their business from future disruptions. For many, this may mean ditching their outdated and limited payment solution and seeking out a provider that offers strong alternative payment tools in addition to traditional in-person solutions.

By: Nicolas Beique, CEO and Founder of Helcim

Nicolas founded Helcim to give businesses a faster, easier, and more affordable way to accept payments. He has a track record of developing software platforms for both SMBs and Fortune 500 companies. Email: community@helcim.com