COMMENTARY: Three Huge Misconceptions Business Owners Have About Payment Solutions

Owners of small- and medium-size businesses (SMBs) generally have a negative outlook on the payments industry, and for good reason. The merchant-services world, in particular, has an ugly track record, including lackluster customer support, not to mention misleading sales practices that lead to costly processing rates, hidden fees, and burdensome contracts. 

This has led SMB owners to see digital payment technology as a commodity rather than the true solution it can be. This view is fueled largely by these three common misconceptions:

1. The Checkout Process is Just a One-Time Financial Transaction

Many owners are trapped in an old way of thinking where they see running a credit card or sticking a few dollar bills in the till as the end-goal of a customer interaction. The truth is that the checkout process can be so much more. It’s an opportunity to collect data to help make smarter business decisions and provides an active means for marketing directly to customers.

While in the past this sort of data collection was reserved for large businesses with pockets deep enough to afford complex point-of-sale systems, technology has come a long way. It’s now affordable for even the smallest of SMB owners. 

Hybrid point-of-sale terminals and compact countertop POS solutions make it easy to aggregate transaction data and get valuable insights into which products are selling and which aren’t, what the peak hours of business are, what days are slow, and so on. It’s critical information that enables owners to manage their businesses more efficiently.

Similarly, new payment technology can easily be integrated with tools for collecting customer email addresses, whether it’s with a digital loyalty program, a digital marketing program, or a simple email capture for sending customers their receipts via email. With an actively growing customer email list, the owner can then easily send marketing campaigns and deals to prompt repeat visits and drastically improve customer retention, which is a direct path to improved revenue.

2. Customers Don’t Care How Businesses Accept Payments 

A similar misconception among SMB owners is that customers are oblivious to how a business takes payment. This couldn’t be farther from the truth, particularly when a business has a clunky old payment terminal or POS system. Old payment hardware is slower, more prone to mistakes, and makes the business seem out of touch.

Conversely, a modern payment solution keeps the checkout line moving faster and reduces the chances of both errors and fraud. It can also create an experience that leads to more repeat visits and word-of-mouth marketing, whether it’s by accepting mobile payment methods and branded gift cards, having an integrated loyalty program, or simply looking sleek and modern.

Mark Silver, owner of Argenti Designer Jewelers in Fort Lauderdale, Florida, can testify to how using a hybrid POS terminal has had a positive impact on his customers. “I’ve created this deeply personal piece of jewelry for them,” he says. “It’s gift-wrapped and in their hands, then comes the technology, when they have to pay—that’s the icing on the cake. The visual of it is so impressive.”

3. It’s Not Worth Seeking a New Payment Solution Because All Providers Are the Same

Almost every SMB owner has gotten burned by a payment provider at some point, and this has caused many business owners to refuse to even consider a new payment solution. It’s a classic case of business owners biting off their nose to spite their face.

The truth is that forward-thinking payment-solution providers have disrupted the old way of doing business in the payments industry, and owners now have a host of options available to them. There are fair, transparent pricing options out there without long-term contracts. There are payment partners that provide ongoing, in-person customer support. More important, there are now so many value-added software integrations with payments, including digital loyalty, marketing, appointment booking, and Web site. 

By dispelling these common misconceptions, owners will suddenly have a multitude of options available to them.

—RJ Horsley is president of SpotOn Transact LLC, San Francisco.