Attending the Southeast Acquirers’ Association (SEAA) conference last week was an amazing experience. Getting to meet new people, rekindle past connections, and seeing all of the latest developments in the payments industry was not only refreshing, but also extremely educational and rewarding. An event like this is something we all used to take for granted, but the COVID-19 pandemic has given me a new appreciation for SEAA, the sponsoring organizations, and my fellow attendees.
This past year was an experience I couldn’t have imagined prior to its arrival but it has truly changed the way we interact with each other, and I’m not just talking about events. Ecommerce, contactless payments, virtual credit cards, and many more innovations brought to the world by the payments/financial services industry have helped businesses large and small adapt to the quickly changing preferences of the consumer. While some things are getting ‘back to normal’, these payment trends aren’t going away.
On that note, I’m offering these five takeaways that will help Covenant Pay Partners and other companies adapt and survive going forward. We know that we are stronger together, and it will take healthy relationships to continue the growth of the payments ecosystem.
1 .More Payment Options = More Revenue
According to a new study, revenues at small businesses increased by 30% or more when offering more than three (cash, check, credit card) payment options. Furthermore, 51% of Americans are now using some form of contactless payment, which includes tap-to-go credit cards and mobile wallets like Apple Pay, according to Mastercard.
Innovation in payment types and giving customers the ability to pay the way they want is only going to get more important.
Everyware, one of the exhibitors I visited at SEAA, is a contactless payments and customer engagement solutions company. Everyware offers simple billing solutions for organizations in a wide variety of industries helping companies collect payments and connect with customers, especially through text messaging, the ultimate contactless technology. I think text-to-pay is going to be a big area of opportunity for Covenant Pay, our merchants, and our partners in 2021 and beyond.
2. Cash Discounting
A recent Consumer Credit article pointed out that 80% of consumer spending in the United States is cashless, and that 80% of Americans prefer to use their debit or credit cards for daily purchases.
Why, then, are we seeing a push in cash discount programs? Well, it’s complicated. 20% of nearly 400 million people is still a large number, and some customers and merchants prefer to use cash instead of credit or debit cards. Also, this sort of program means that merchants can pass along processing fees to the customer, potentially saving them money. These programs are probably great opportunities for social responsibility-focused companies that can convince donors or consumers to cover the cost of the fees associated with their purchase or donation.
I was impressed with WaivePay from Priority IS, another exhibitor. In short, their program eliminates merchant processing fees for businesses. The total transaction (cost of goods/services + non-cash adjustment) is deposited into the merchant’s account and the non-cash adjustment fee is automatically redirected to the processor eliminating the large monthly debit merchants typically incur.
It may seem counterintuitive with the stats above, but my friends with WaivePay assure me their program is growing in popularity for all sorts of retailers.
3. Fraud is Everywhere
According to Lexis-Nexis’ 2020 True Cost of Fraud study, every $1.00 of fraud now costs US retailers $3.36, up 7.3% from 2019, and the total number of fraud attempts is up 24.2%. So, fraud is getting more common, and it’s getting more expensive.
How, then, do we as an industry help our merchants to combat this very real issue? As seems to be the case with everything, the answer is probably better technology. I visited Eye4fraud, another exhibitor, and they’re doing some exciting things with artificial intelligence (AI), machine learning, and a wide variety of external data sources to help automate fraud detection so merchants can focus on their business, not trying to figure out whether or not any given transaction is fraudulent.
If your business isn’t already working on something to help combat fraud, you need to be. This problem is only getting worse.
Every industry is having a hard time finding good people these days. This gives employees the ability to better advocate for themselves, but it also means that some more entrenched organizations may have to step outside their comfort zone in order to find the right people. Unconscious bias in hiring processes and software systems may be keeping you from seeing some great candidates. Candidates, that means that while you are in demand, you need to be aware of what could be holding you back.
So, some advice for anyone looking to make a move in 2021:
- Don’t settle. Ask for what you are worth, but once you have let them know what you want, stick with it.
- Be professional. Return communication promptly and professionally. This has become a big issue with employers, and slow communication will get you booted from the interview process.
- 1099 regulations are about to change, and you will probably end up as a W2 employee anyway, so look for good benefits.
- Get to know the company. Talk to the regular employees, even past employees (look them up on LinkedIn), and find out the real story.
To the businesses that are concerned they might be inadvertently screening out candidates, I encourage them to connect with my friend Katherine McCord, President of Titan Management, who has just begun production on a revolutionary hiring software that will focus on skill sets, remove the possibility for bias in the application process, and showcase diversity, equity, inclusion, and candidate experience accountability.
5. Relationships Are Everything
Yes, it’s 2021, but this isn’t ‘Death of a Salesman’. Relationships ARE really everything. Having a transparent and clear relationship with partners is key to the growth and performance of any sales organization. Covenant Pay Partners works closely with several partners to bring a unique and custom experience to our clients.
One such partner, who was also an SEAA exhibitor, is First American Payment Systems. When they say:
ISOs need payment solutions that enable their merchants to serve customers in both physical and digital environments, and contactless payments offer the transaction speed merchants want as well as the touch-free feature consumers desire.First American Payments Systems
It is not just a bunch of empty marketing speak. I can speak from experience that they will work with you and your merchants to build a truly custom payments solution that will help increase visibility, control, and efficiency in processing your payments.
In closing, I couldn’t be more excited to crush the rest of 2021. If you want to learn more about Covenant Pay Partners and our approach to merchant services, connect with me here.