Endpoint: How to Get Small Businesses to Pay for Mobile

They’ll gladly pay if financial institutions offer applications that allow them to generate new revenue, cut costs, and satisfy customers, says Sean Pennock.

Being able to quickly create a significant return on investment for business customers is essential. This will give true meaning to the old adage, “Improve my business, and you will get my business…”

Sean Pennock is president and co-founder of Rockwall, Texas-based Aptys Solutions.

In an ever-changing market climate where free mobile-banking technologies that offer very basic functionalities are dominated by only the largest of financial institutions, others struggle to keep up with emerging technologies. This is because it becomes cost-prohibitive to invest in technologies that do not generate any financial return.

With the explosive growth and availability of 3G and 4G networks, coupled with the increasing consumer demand for mobile-banking applications that offer more sophisticated capabilities, the question for financial institutions remains: How do you deliver a mobile solution that is profitable, while delivering a strong return on investment for the small-to-medium-size business customer?

Make no mistake. The answer to mobile success for financial institutions lies with the business customer. Businesses have both the resources and willingness to pay for services that support them in becoming more efficient and accomplishing their objectives. Financial institutions that want to leverage technology to increase revenue and fee-based income need to look at how they can make themselves indispensable to the business customer’s success.

Shift in Focus

This will require a shift in focus—from mobile-banking solutions to mobile-business solutions. And mobile-business solutions will have to do three things:

– They must provide easy-to-use, best-in-mobile business applications with the latest in mobile-payments technology that consumers are beginning to expect;

– They must address and seamlessly link revenue-critical business functions, like improving the customer-service experience, streamlining customer invoicing, accelerating accounts receivable, and improving the quality and accuracy of back-office accounting operations;

– They must drive measurable cost savings and efficiency for the business customer, easily demonstrating a strong return on investment.

When financial institutions offer a mobile application that can integrate this functionality, they will be able to push past the “free” product offerings prevalent today to justify a new revenue stream. Businesses will readily accept this cost not only because of the ability of the mobile application to drive bottom-line savings and exceed their own customer’s expectations, but also because the application will become a necessity, adding stickiness and depth to the relationship.

Technology exists today that can enable small-to-medium size businesses to work more efficiently in the field by eliminating paper and conducting all transactions through a mobile device. This multifaceted technology stands to benefit any consumer-facing business that creates invoices outside of their brick-and-mortar operations (i.e. repair, installation, or cleaning services).

It makes sense for financial institutions, which serve small businesses and ultimately process their payments, to be the ones providing a service such as this. Financial institutions have long been searching for ways to offer products that will further integrate themselves with a business’s accounts-receivable operation.

By equipping businesses with an application that ties directly into the back office, financial institutions help small-business owners empower their sales and service teams to check inventory, electronically create invoices, and collect and submit payments of any type for processing—all in less time than it would take to fill out a traditional paper invoice.

Such a solution could save small businesses up to a quarter of an hour per transaction, freeing up time to serve more customers while pulling forward the deposited funds immediately rather than at the end of the day or, in many cases, in multiple days.

Furthermore, by tethering the mobile device to the internal accounting systems of a business, the mobile application can sync information such as labor rates, parts costs, and inventory availability in real time while streamlining and improving the accuracy of what was once a very labor-intensive process, making every customer interaction more efficient.

By offering more sophisticated mobile technologies that address the real challenges small-business owners face in payments, including invoice creation and back-office operations, financial institutions can finally take a proactive position, creating new revenue streams and opportunities for the additional fee-based income being sought after today.

Being able to quickly create a significant return on investment for business customers is essential. This will give true meaning to the old adage, “Improve my business, and you will get my business…” It’s also something that has become increasingly difficult for financial institutions to achieve in a world where there is pressure from non-traditional payment-processing companies popping up on what feels like a daily basis. Financial institutions must continue to find ways to become essential to their business customers’ daily operations.

Mobile solutions are becoming a key link in relationship banking, enabling financial institutions of all sizes to fuel the appetite of their customers by packaging mobile solutions with other financial services to make them all more appealing to consumers and businesses. This entices them to open more than just a checking account and caters to their curiosity about the mobile world.

In a market where consumer demand is high for mobile solutions, financial institutions can also leverage their mobile offerings as a platform to generate new revenue from existing customers, cross-sell additional services, and attract new business—a profitable solution for the bank and the customer.

The technology talked about here is just what financial institutions need to re-inject themselves into their business customers’ needs. Current financial-product offerings today do little, if anything, to improve business customers’ bottom line, yet that is becoming more and more paramount to survival and continuing profitability. Providing significant cost savings and a vastly improved customer experience for businesses, coupled with additional fee-based income revenue for the financial institution, creates a win-win situation for all!