How Would You Like to Pay For That? Let the Customer Decide!


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Highlights from Laurie McCabe’s presentation at Sage Summit 2014 about key trends in payments and commerce--and what they mean for SMBs!

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How Would You Like to Pay For That? Let the Customer Decide!

  1. 1. How Would You Like to Pay For That? Let the Customer Decide! Laurie McCabe, Cofounder and Partner SMB Group August 2014 Originally presented at Sage Summit 2014 August 2014 1© SMB Group
  2. 2. How Would You Like to Pay For That? Let the Customer Decide! • Top Trends in Payments and Commerce • Putting Payments in Perspective for SMBs • Payments Opportunities and Challenges • Summary and Q&A 2August 2014 © SMB Group
  3. 3. © SMB Group Getting Paid is A Priority for All Businesses 3August 2014
  4. 4. Change is the New Normal for Commerce and Payments Ecommerce continues to grow Mobile payments accelerate More Ways to Pay Social shopping 4 Omnichannel  Omnicommerce  Omnicustomer August 2014 © SMB Group
  5. 5. Ecommerce Continues to Grow 5 $1.5 Trillion 2014 • Forecast for global B2C Ecommerce sales $71.2 Billion Q1 2014 • Q1 2014 U.S. retail ecommerce = $71.2 billion • Up 2.8 percent from Q4 2013 Younger Higher Earners College- educated • Young consumers (60%) higher earners (63%) and college- educated consumers (61%) are more likely to shop online Sources: eMarketer, U.S. Census Bureau of the Department of Commerce, Vantiv August 2014 © SMB Group
  6. 6. Mobile Payments Revolution $1 trillion by 2017 • Mobile payments expected to exceed $1 trillion worldwide by 2017 2013 19.5% of all online payments • 19.5% were made from a mobile device, up 55% over 2012 Millennials and younger users • 55% of those who use mobile payments are aged 18-34, compared to 35% for 35-54 6 Sources: IDC, Nielsen, Vantiv August 2014 © SMB Group
  7. 7. Barter Check • 1400s Commodity • 1700s Coins and bills • 1700s Credit cards Debit cards PayPal ACH Gift cards Prepaid cards • 1900s Mobile payments Bitcoin Dwolla ??? 2000s • Technology • Convenience • Faster payments • Lower cost • Flexibility • Risk management • Loyalty More Ways to Pay 7August 2014 © SMB Group
  8. 8. © SMB Group Social Shopping 8 Group sites Bring together groups of people to buy at wholesale prices Groupon, LivingSocial, etc. Costco Recommendation Shoppers to provide advice to fellow shoppers. Amazon, eBay, etc. Asking a fellow shopper for advice Marketplaces Social sites that bring independent sellers and buyers together. Shopcade, Polyvore, Etsy Farmer’s markets Social networks Uses API on social networks for input and purchases Facebook, Twitter, Pinterest, Referral/reselle r August 2014
  9. 9. The Result? Omnicustomers in an Omnicommerce World • Customers interact with businesses through more channels prior to transaction o 40% of purchases are omnichannel • Channels are blurring o More than 1/3 of in-store shoppers use smartphones to check prices, browse alternatives, price match and check stock • Businesses must make it easy for omnicustomers to shop and purchase in an omnichannel world Sources: Carlise and Gallagher Consulting Group, Vantiv Brick and mortar Ecommerce mCommerce 9August 2014 © SMB Group
  10. 10. Examples of Change • Five Guys mobile app o Turns every customer’s smartphone into a personal POS o > 1 million customers use it • Lollapalooza Cashless o U.S. music festival will begin using RFID wristbands for payments at its concerts o Tap against POS systems with PIN code for purchases o Applied to debit or credit card • Iowa Department of Revenue o Uses Dwolla to allow businesses who pay more than $100 million in cigarette stamp taxes a cheaper, safer, faster method than mailing and processing a paper check 10August 2014 © SMB Group
  11. 11. Putting Payments in Perspective for SMBs 11 6% 8% 8% 17% 26% 30% 32% 45% 57% 70% Obtain financing Business model changes with mobile solutions Other Effectively manage relationships with suppliers React quickly to changing market conditions Improve customer experience Retaining customers Improve cash flow Maintain profitability Attract new customers Source: 2013 SMB Group Study of Sage installed base customers What do you view as the top 3 business goals for your company this year? August 2014 © SMB Group
  12. 12. Payments Opportunities Opportunities Give customers more convenience and choice Increase repeat purchases and customer loyalty Keep pace with what customers want Streamline payments process Generate more revenue Get paid faster Lower costs 12August 2014 © SMB Group
  13. 13. SMBs Manage Multiple Payment Types Today 13 20% 33% 32% 16% 51% 35% 63% 96% 93% Gift/loyalty cards PayPal Business cards [P-cards(payment… Other Cash Debit card ACH (Automated check clearing) and… Credit card Paper checks What forms of payment does your company accept? Source: 2013 SMB Group Study of Sage installed base customers August 2014 © SMB Group
  14. 14. © SMB Group New Capabilities Planned for Tomorrow August 2014 14 8% 17% 23% 28% 29% 32% 57% Other (Please specify) Tablet (e.g. iPad) Paper check Image/scanner/reader Smart phone Credit card (retail/POS) terminal Online web store Virtual web terminal How would you like to accept credit cards in the near future (next 24 months)? Source: 2013 SMB Group Study of Sage installed base customers
  15. 15. © SMB Group 22% 23% 25% 17% 18% 18% 34% 33% 30% Access marketing offers Check invoices and pay bills Purchase and pay for goods and services Available now Planned in next 12 months No plans Use and Plans for Customer Enabled Mobile Payments August 2014 15 +10% +11% +9% Change vs. 2012 Which of the following functions can external users (customers, suppliers, partners, etc.) access through your company's mobile-device friendly web site and/or mobile applications? SMB Group, 2013 Small and Medium Mobile Business Solutions Study
  16. 16. Payments Challenges Challenges More payment types, devices, networks and data More data that needs to flow between payments, financials, CRM More complex visibility, management, regulatory and security issues More infrastructure, resources and expertise required Accelerating pace of change August 2014 16© SMB Group
  17. 17. © SMB Group 4% 6% 8% 13% 15% 26% 32% 36% 17% 17% 14% 31% 26% 34% 32% 37% 31% 28% 25% 28% 23% 20% 21% 19% 14% 12% 18% 12% 8% 10% 4% 5% 35% 37% 35% 16% 27% 10% 10% 4% Prepaid business cards Mobile wallets Mobile marketing solutions be to your business System to automate paying your company's bills Cloud storage Process all payment types and connect all your payments devices Single username and password for access Ability to view all your payment transactions real-time by device and… Very beneficial Somewhat beneficial Neutral Minimal benefit No benefit Integrated Payments Solutions Provide Visibility, Agility and Flexibility 17 Source: 2013 SMB Group Study of Sage installed base customers August 2014
  18. 18. © SMB Group Integrated Payments Solutions Save Time and Money August 2014 18 Credit card transactions per week Transactions per year Time Savings per year (hours) Credit card processing cost savings per year 20 1,040 85.6 $2,140 30 1,560 128.4 $3,211 50 2,600 214.1 $5,353 How much time per transaction do you save by taking credit card transactions inside the application (compared to taking them outside of it?) Source: 2013 SMB Group Study of Sage installed base customers On average, companies save 4.94 minutes per transaction when processing credit card transactions inside their ERP/financials application (compared to processing it outside of the application)
  19. 19. Reaping the Benefits of Integrated Payments Solutions • Charles J. Becker and Brother, Inc. o Sells school supplies via retail, catalog and web o “We need to be there for our customer, whether they’re buying a few items on a credit card or for a whole school through a contract and ACH. Integrated payments help us do us process transactions quickly and accurately.” − Joe D'Ambrosio, Controller (Sage Payments and Sage 100 user) • Ledeboer Farms o Grass seed production and sod farms o “Being able to accept credit cards on my mobile phone from the tractor save me a tremendous amount of time, and for me, time is money.” − Burkhart Ledeboer, sole proprietor, Ledeboer Farms (Sage Payments and Sage 50 user) 19August 2014 © SMB Group
  20. 20. Is Your Business Prepared? New commerce and payments trends are accelerating Customers want to choose how they pay Security is paramount Manual re-entry and reconciliation with financials more time consuming Visibility across multiple payment services is required—but becomes more difficult Businesses need flexible, integrated payment platforms to capitalize on payments opportunities. August 2014 20© SMB Group
  21. 21. For More Information • Adding Business Value with Integrated Payment Solutions SMB demand for a simple but comprehensive integrated payment solution is rising. Future integrated payment capabilities—such as the ability to view all payment transactions in real time, from one place, and to have a single username and password for access to all payments information. • Driving Business Growth and Efficiency with Integrated Payments In this report, we examine why more SMBs are adopting integrated payment solutions. We explain how integrated payments work, and discuss how three very different organizations use and benefit from Sage Payment Solutions. 21August 2014 © SMB Group
  22. 22. Thank You 22 Website: Blog: SMB Group, Inc. Laurie McCabe Cofounder & Partner 603-521-7858 August 2014 © SMB Group