During the pandemic, the perspective of many small and medium-sized business (SME) owners has changed. Many small businesses may have kept their roots in physical operations and then moved online.

Robert Clarksonrevenue manager at Payer, told Karen Webster of PYMNTS that there has been a shift in how small businesses, even sole proprietorships, come to market. Overall, SMEs have had to adopt a digital-first strategy, keeping an eye on the global stage and across multiple channels.

“What we are seeing now is that businesses are starting from day one online only, [and only later] gravitating towards a more local presence,” he said.

While small businesses previously started locally and then continued to grow globally, many are now going international from the outset, seeking consumers through multiple direct and commercial channels. With sporadic drop-in traffic in their home markets due to the pandemic, they had to invest more than ever in their digital strategy.

“You have to find businesses,” regardless of the market, Clarkson said. This means investing in digital advertising, online storefronts and social media. But in an age of increasing cross-border trade, expanding its customer base often brings increased complexity and localization requirements.

Related: Payment Orchestration Guide: SMBs Embrace the Digital Payments Framework

Catering to an expanded base

Clarkson said SMBs need to cater to their expanded customer base by offering multiple languages ​​on their sites and accepting payments in multiple currencies.

“If you’re an SME, you need to be able to present to a US buyer, a UK buyer, a [Vietnam]in their own language and currency to make sure you’re relevant,” he said.

That same reach and breadth is important as the gig economy grows and smaller stores expand their businesses to market services internationally. The problem is that many of these smaller companies may not have the technical know-how or the resources to accept these currencies and compete with the capabilities of larger companies. After all, payment systems differ from region to region, and even from country to country within the same region.

Vendors, in turn, must empathize with the limited resources an SMB has and must provide an intuitive, streamlined onboarding experience and an easy-to-navigate interface.

Clarkson said outsourcing this payment functionality to vendors, including Payoneer, can make it easier for SMBs to invoice and collect in multiple currencies and across multiple geographies, leveling the playing field between SMBs and their big brothers.

External payment providers, he said, also increase the likelihood that payments will be authorized and routes will be optimized to ensure transactions are completed.

Importantly, companies like Payoneer also conduct critical know-your-customer (KYC) processes in a digital environment where unknown buyers interact with unknown sellers.

“What they have in common is that there is a product or service that one party wants and the other party provides,” Clarkson said. “We spend a lot of time making sure the verification process takes place and the conversion rate increases.”

See also: 88% of businesses selling on marketplaces receive payments through them

Platforms smooth out rough edges

FinTech platforms can help bridge the gap between the complex challenges faced by modern digital businesses and the capabilities of largely analog financial infrastructure. This includes everything from enabling an array of KYC processes that vary by geography, optimizing settlement and conversion rates, better cash flow visibility, and quick access to working capital.

The latter is critical, Clarkson said, because traditional banks don’t tend to be enthusiastic lenders to the SME community.

Supply chain issues, which have dominated the headlines in recent months, have also underscored the importance of flexibility between buyers and sellers. SMBs, he said, need an easy way — especially with B2B transactions — to pivot between marketplaces in order to get and sell what they need.

Looking ahead, he said SMEs are increasingly becoming global businesses and seeking the widest possible geographic coverage as they capture new customers and new sources of revenue, including options for immediate purchase and subsequent payment.

As Clarkson told Webster, “You must ‘act’ globally, but ‘look’ local.”

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NEW PYMNTS DATA: ACCOUNT OPENING AND LOAN SERVICE IN THE DIGITAL ENVIRONMENT

On: Forty-two percent of US consumers are more likely to open accounts with financial institutions that facilitate automatic sharing of their bank details upon sign-up. The PYMNTS study Account opening and loan management in the digital environmentsurveyed 2,300 consumers to explore how FIs can leverage open banking to engage customers and create a better account opening experience.


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