How SMBs are re-inventing themselves and how the payments industry can help
Small and micro businesses (SMBs) are the backbone of the economy and many were devastated when COVID-19 hit. Facing an unrecognizable commercial environment, SMBs have had to re-imagine their business models to survive. In fact, 60 percent of SMBs in the U.S. said they pivoted and tried a new approach to keep their business afloat, according to Visa’s Back to Business Study.1
The SMBs that are pulling ahead are laser-focused on their customers and responding to the new ways they live, work, and buy.
As small businesses are transforming to meet their customers’ changing needs, there is a tremendous opportunity for issuers and acquirers to do the same and support their small business clients in creative new ways. To start, it helps to understand how SMBs are becoming agile in three key domains in order to survive and thrive in this new world.
What you sell
"Small businesses are always putting themselves in the shoes of their customers, looking at their needs and then finding new solutions," says Mary Kay Bowman, Global Head of Buyer and Seller Solutions at Visa. Early on during COVID-19, many small businesses in the hospitality industry, for example, reacted to the shutdowns by changing their offerings. Movie theaters transformed their parking lots into drive-in theaters and restaurants pivoted to all kinds of approaches – meal kits, curbside pick-up, and even selling grocery staples.
Small businesses that create experiences for customers changed too. Culinary Adventure Co. usually operates food tours in different neighborhoods of Toronto. During COVID-19, the company started offering ‘Food Tours in a box’, curated treats from a given neighborhood or favorite purveyor.2 Community support has been a lifeline for many SMBs. In Visa’s Back-to-Business study, 71 percent of SMB owners said support from their local community has been critical to their recovery efforts.3
"Issuers and acquirers can take a page from SMB’s playbooks and support their clients by thinking of their customers’ needs as they transform," according to Bowman. Questions to address include: Do SMBs need additional cash flow? Do their traditional checkout and point-of-sale tools match the new ways they are serving customers? If they are considering tap to pay, do they have the equipment and systems in place to do so? "By finding out what SMBs need and anticipating the new problems that are cropping up, issuers and acquirers can create the best solutions, tailored to their clients," she adds.