4 actions small businesses are taking to help them navigate today’s environment

Hear how new payment behaviors are creating opportunities for small businesses.

Transcript: 4 actions small businesses are taking to help them navigate today’s environment

MARYAM ENDERS: Hello, thank you for joining us today.

I am Maryam Ender with Wells Fargo Merchant Services.

I hope you and your loved ones are all in good health.

To say that 2020 was a challenging year would be an understatement.

I don't have to tell you it was a year unlike any other any of us have experienced.

In March, we were all personally impacted by the news of COVID-19, also known as corona virus.

Small businesses were especially hit hard.

Business owners heard something they never wanted to hear.

You must close down.

The closure of offices and stores was temporary but when these businesses reopened, they dealt with multiple challenges.

As we reached out to small business owners, they had questions such as "How can I remain open if I cannot have customers in my store to shop and make a purchase?

If I'm only seeing patients virtually, how can I get paid?

What are my options for taking a card payment if we must socially distance?"

These were common concerns among all business owners regardless of their industry or size.

Every business across the country had to reconsider how they would operate in this new environment.

I'm sure you can relate.

However, small businesses are no stranger to resiliency.

I've seen this first-hand as my parents have owned and run businesses my entire life.

Like you, they've dealt with slow sales periods, breakdowns in the supply chain, power outages, employee turnover, and disruptions in technology.

The list goes on.

Running a business is not for the faint of heart.

Yet, you find ways to persevere, to overcome challenges, to satisfy customers, and 2020 was no different.

Business owners such as yourselves found ways to keep their doors open regardless of stay-at-home orders or social distancing requirements.

Adapting to a new environment was crucial and an important step that businesses took.

They quickly pivoted how they sell products and services.

And adopted new payment methods.

When you let customers pay you almost anytime, anywhere, you open the door to possibilities.

It's also possible that you haven't needed to change your business at all since COVID-19 and that's normal too.

Not all businesses have needed to adjust.

Our goal for today is to share some stories of how other businesses are adopting new payment methods and to help you come away with ideas and opportunities for your business to navigate today's environment.

Thank you for joining us today.

And now let's get into the presentation.

Today, we'll share some common actions small business owners took in 2020 to help them keep their doors open and grow and maintain sales during uncertain times.

They are, first, offer your customers multiple ways to pay while also delivering a seamless payment experience.

Second, view payments as a strategy to help your business grow in the future.

Third, re-train employees how to accept payments safely, efficiently, and in ways that minimize costs.

And four, know when to ask for help and reach out to your partners like your bankers.

I've work with business owners of all sizes across multiple industries since I came to the United States 11 years ago.

As I mentioned earlier, my parents owned businesses in Toronto, Ontario and in Gilbert, Arizona, so I personally understand the peaks and valleys business owners face and I understand what's needed in terms of managing cash flow.

Joining me later in the presentation is Isaac Dixon, also from Wells Fargo Merchant Services.

He's worked in the industry for 17 years and has seen several different crises throughout his career.

He understands what business owners are going through and how to support and offer options that may help them.

Now, let's get into how small businesses can navigate a challenging business environment.

One step small businesses can take is considering whether or not to adapt their business models.

In 2020, businesses had to quickly pivot how they sell and deliver products and services.

Businesses may have had to consider new payment methods to ensure they offer customers multiple ways to pay.

When adopting a new payment type, consider how to deliver a seamless consistent payment experience for customers regardless of how they engage with your business, or which payment method they use.

What I mean by this is it should be as convenient and simple to make a payment online or by phone as it is in person, and vice versa.

Because these payment types are new to some businesses and to their customers, it's crucial that the customer experience is as easy and straightforward as their prior payment methods.

The most common types of payments we see businesses continuing to adopt are contactless cards, curbside payments, scan-to-order, as well as services like buy online, pickup in store, and e-commerce.

We helped a small business owner take his entire operation online with an e-commerce option that integrated into his existing business software.

A large auction company in Arizona can no longer run its business as usual due to the lockdowns and social distancing measures.

As an auctioneer, they conducted business face-to-face.

The owner understood that to remain in business, he needed to adapt but he was hesitant.

He had an auction software platform, but he hadn't used it to collect payments.

In fact, he tried to integrate credit card processing into his software in the past but many processors had issues incorporating payments.

Luckily, we have a dedicated team that researched the challenges and were able to come to the owner with an option that could integrate with the owner's current platform.

We also provided a team that supported him through the integration process.

The owner shifted his entire auction operation online and in the first six weeks of using the e-commerce option, he more than doubled his sales.

His business is doing better now than before the pandemic.

He says he'll never go back.

He will continue to sell and take payments online.

This past year has also shown us how important it is that businesses accept multiple payment types.

Businesses should be flexible to serve the needs of their customers, deliver the options they want, and allow them to pay the way they prefer.

If you don't, they may find a business that will.

As analyst firm Javelin Strategy & Research stated, "The greatest lesson with COVID-19 is that a merchant cannot limit their sales to one channel."

Let's take a look at a business that realized this first-hand.

Silverlake Wine is a retail wine business with three locations in Southern California.

At the start of COVID-19, their customers could shop in person or place an order by phone.

When their customers could no longer shop in-store due to stay-at-home orders from the state, Silverlake Wine saw a spike in phone orders.

They try to keep up with their orders by having employees answer calls 12 hours a day.

Silverlake Wine could not keep up with the demand for their products and many times customers got a busy signal when they'd call to place an order.

This was not an optimal customer experience.

But also it meant lost sales for Silverlake Wine.

We had already spoken to this customer in the past and at the time they weren't ready to implement an e-commerce option.

We called them in March to check in and help them understand the impact of only allowing one payment method, phone orders, was having on their business.

We helped them quickly integrate online ordering into their website and recapture lost sales.

Their sales started to grow as a result.

Silverlake Wines owner shared with us afterwards: "Our retail wine business has never been so disrupted as it has by the onset of COVID-19.

We search for solutions to help us simultaneously offer our products online, and provide a nimble platform to process a high volume of orders all the while keeping our brand identity intact.

With Wells Fargo's assistance, we seamlessly transitioned to an online platform that is intuitive, scalable, and reliable.

Without it, there's no way we could meet and create demand for our wine, beer, and spirits.

It's turned these uncertain times into times of economic prosperity and exponential growth for our company."

Silverlake Wine's experience is not unique.

In fact, you may be able to relate yourselves.

Maybe you had to start taking orders online.

Or maybe you can remember back when your business first offered an e-commerce option to your customers.

2020, like other tough economic times, required that businesses adapted or they'd lose sales.

And this meant that businesses and their customers began to adopt new ways to pay.

In 2020, one in four Americans started shopping online for the first time ever according to industry publication Card Not Present.

They also use contactless payment options more because they allow them to pay without touching anything other than their own card or phone.

Or they can make a payment without leaving their home.

Consumer adoption of digital payments like e-commerce, digital wallets, and contactless cards accelerated in 2020.

Card Not Present also reported that one in three consumers said their use of touchless payments has increased due to the pandemic and 69 percent plan to use more touchless payment options in the future.

For digital wallets like Apple Pay, Google Pay and Garmin Pay, analyst firm The Strawhecker Group found that 33 percent of consumers intended to use digital wallets even more in the next year.

Only seven percent say they may use digital wallets less after the pandemic.

Plus, the World Payments Report 2020 from Capgemini predicts that over half of the world's population will be using digital wallets by 2024.

If you weren't accepting digital wallet payments, now may be a good time to begin.

Where customer's paid also changed significantly.

Buy online, pickup in store, and curbside pickup emerged as popular ways to shop.

Think of it.

A year ago, would you have pulled up into a parking lot, popped open your trunk, and allowed a store employee to load your electronics, your clothing, or school supplies into your car, all without any interaction with the employee?

You may have done this with groceries but in the past year, this way to shop became the norm and the numbers prove it.

The IPSOS E-Commerce Experience Report showed that 78 percent of shoppers increased their use of buy online, pickup in store since COVID-19 began and 69 percent expect to continue using it at the same or higher levels in the future.

The split between the two is about 50-50.

Forty-three percent of consumers recently used buy online, pickup in store, while 50 percent said they took advantage of curbside pickup.

This dramatic shift in consumer behavior helps show why businesses that pivot and give customers more ways to pay are the ones who may tend to survive, and in some cases thrive in a challenging environment.

The pandemic is also changing the way business-to-business B2B payments are being made.

Office closures and remote work pose a challenge for the traditionally paper-based accounts receivable departments.

Because checks account for the majority of B2B payments, these businesses are rethinking how they invoice, bill and accept payments.

B2B businesses were already starting to shift to digital invoicing, recurring billing and digital payments prior to 2020 as an alternative to using mail or paper but the pandemic accelerated the process.

According to Mastercard, more than half of small businesses say they've increased their use of digital services for business-to-business payments since the start of the pandemic.

And 73 percent say digital payments are the new normal for their business going forward.

As we enter a new year, we'll continue to face challenges and uncertainty.

Business owners are no longer seeking short-term solutions.

Instead they are planning for the future to help them weather any storm.

In the case of B2B small business owners, the pandemic made it clear that their previous ways of doing business may have been too labor and time intensive.

And according to Mastercard, 70 percent of B2B companies are willing to invest in technology that will advance their payment systems.

In addition to recognizing that too many payment processes are manual, businesses recognize that customers' shopping behaviors and preferences changed in the last year and these behaviors may be here to stay.

A recent McKinsey & Company study found that 76 percent of consumers used a new shopping method since the start of COVID-19 and 75 percent say they will continue to use these new methods after the pandemic has subsided.

The longer that social distancing and safety concerns have gone on, the more comfortable consumers have become with making digital payments.

Their new ways to pay may become habitual.

Business owners are understanding this and seeing opportunities to invest in their future.

They're doing this by evaluating how they are taking payments now and whether they can find ways to deliver the experience that their customers want and expect.

Consumer adoption of digital payments such as contactless, digital wallets, and e-commerce will likely continue.

They are seeing the convenience and ease of these payment types and may expect merchants to continue to provide touchless environments.

Businesses may want to consider how they will handle cash and checks in the future since these payments are not touchless.

In fact, a study from Strawhecker Group found that 26 percent of consumers expect to use less cash following the pandemic and 81 percent of merchants intend to make contactless payments a permanent option at the point of sale.

Businesses of all sizes may also want to research new point of sale systems that can take payments and more.

There are point of sale technologies that not only accept payments but also provide business management tools to help you do things like manage inventory, employee scheduling, customer marketing and more.

They integrate across your locations and provide cloud-based reporting so you can keep an eye on your business no matter where you are.

When a business adopts a new payment type, they must also understand whether it impacts how to keep payment card data safe throughout the payment process.

There are serious implications if you're not following mandatory compliance programs or if you experience a data breach.

Your merchant services provider can assist you with understanding the requirements and compliance best practices.

I'll now pass the presentation over to Isaac Dixon who can go into more detail on his experiences working with small businesses.

ISAAC DIXON: Thank you Maryam, and hello everyone.

I'm Isaac Dixon.

I've personally helped small businesses deal with various financial and economic crisis throughout my career.

I'll share examples of what I've seen work for businesses in the past and what we at Wells Fargo Merchant Services are seeing work for our customers today.

An area we often advise our customers on is employee training, especially when significant changes are made in business processes, such as payments.

Your employees are oftentimes the first or only person your customer engages with.

They are the face of your business.

It's to your advantage that they be able to assist customers when making a seamless payment experience.

In the past year, we've helped many customers with training.

We've shown employees how to take a contactless payment and what to say to a customer at the point of sale to make their transactions convenient and seamless.

Many times customers are in need of direction when at the point of sale.

You've probably experienced this as a consumer yourself.

Your payment is due and you hesitate for a second to wonder, "Do I tap?

Do I dip?

Do I swipe?"

You may also wonder, "Are the buttons clean?

Do I have to sign?

Why do I have to sign?

When's the last time the terminal was wiped down?

Should I use debit or credit?"

Small businesses tell us their customers are asking questions like these and training their employees on how to reassure and direct customers at the point of sale is invaluable.

Signage can help here too.

Other advice we share with customers is, "Don't forget to turn off your signature settings and teach employees how and why to run card present payments when possible."

This became an opportunity as curbside or phone orders became more common.

Rather than keying in the card information by phone when the order is placed, an employee can use a handheld point of sale device to take a payment at the curb, at the door, or at the counter.

This way you'll pay the card present rate rather than the higher card not present rate.

The unprecedented events of 2020 led business owners to reach out to other business owners or mentors for assistance and guidance.

They saw value in asking for help and tapping into their knowledge.

We experienced this at Wells Fargo.

And because our bankers work closely with other areas of the bank, such as merchant services, we were able to quickly connect small businesses with options that may help them navigate a challenging environment.

Last March restaurants in some cities and states were told to close their doors.

Then came news they could reopen but for only takeout or delivery.

But what about those restaurants or businesses that didn't have that option?

How could they remain open if they could no longer serve customers on premise, and they didn't have a way to take an order by phone or online?

Our customer, Griddle Mongolian Grill, reached out to us with this exact dilemma.

They didn't see a way to keep their doors open.

And since their customers choose their ingredients for their meal, and are charged by the weight of the ingredients, they only took guest orders onsite.

It felt impossible to continue to run their business if their guests could not come into the restaurant.

After reviewing options, the customer chose a Clover® point of sale solution that could connect by Wi-Fi to take orders outside the restaurant doors while adhering to social distancing rules.

The owner told us, "With the help of Wells Fargo, I was able to remain in business."

We assisted hundreds of other restaurant customers across the country with similar needs.

Sometimes when a small business contacts us for help, we may uncover opportunities outside of their original need.

For example, we were recently assisting an optometry practice with refinancing their practice.

Because we spent time assessing all of their business needs, we started to talk about business checking, and eventually, merchant services.

Because in challenging economic times, maintaining your cash flow becomes more important than ever.

In fact, it's always important.

That's why when we spoke with some small business customers in the last year about cash flow, and how quickly their funds are deposited into their account, we learned that during the uncertain times in 2020, some payment processors began to delay funding or assessed fees.

In the case of the optometry practice, we explained how we could help them manage their cash flow while times were tight.

With Wells Fargo, they could get funding as soon as next business day.

They wouldn't be charged a fee for this and we weren't placing restricted access on funds like some other processors may have been.

Another business owner of a sushi and seafood restaurant depleted her savings as the pandemic carried on.

Her current processor was only depositing her batches two days a week due to the pandemic.

She was stressed out about her funding being held for such a long time and it was impacting her ability to purchase food and supplies, or pay her employees.

As a result, her personal savings was almost gone when we spoke with her.

After reviewing options, the customer chose a merchant service account in addition to her bank account and she received her funds as soon as next business day.

She no longer had to rely on getting paid only two times a week.

With the optometrist, we went further into a business needs assessment after we discussed funding as soon as next business day.

We found a way to reduce his monthly costs and upgrade his current point of sale equipment.

Stories like this are not uncommon among our team.

We truly take a consultative approach when speaking with business owners.

And I encourage you to do the same when you decide to turn to other business owners or mentors for help.

Seek others who take a comprehensive approach when making recommendations, and ensure they understand all aspects of your business, not only how you accept payments.

While reviewing processing statements is an important way to uncover opportunities to potentially reduce costs, consider looking for a banker like us who takes time to listen and assess your entire business, and potentially find opportunities that may help you improve and manage cash flow.

Things such as tax reporting, inventory management, the cost of employee theft, staffing and more.

Having a complete picture of your business lets us truly work with you to determine opportunities to possibly streamline and/or enhance current processes and provide information about best practices, resources and options that may help you meet your objective.

Some small businesses may be evaluating whether the time is right to switch processors.

Processing costs factor into the decision but also whether you can switch without disrupting your business.

There is a perception that switching processors and upgrading point of sale equipment can be difficult, and you may have experienced this when you've changed processors in the past.

However, it may be easier and simpler than you think.

You can start accepting card payments as soon as the next day if your application is approved.

In closing, I hope you found today's presentation helpful and that you were encouraged by hearing stories of resilience and adopting new payment methods.

I want you to come away from this webcast knowing this: We're here when you need us, even if it's down the road.

We know you're facing unprecedented challenges and we're here to help your business succeed financially.

Please contact your banker and we'll be happy to set up a time to talk about managing cash flow and potential opportunities for your business.

Thank you.

English (United States)

Or call 1-866-380-9828 Monday – Friday, from 6:00 am – 6:00 pm Pacific Time.