Through the pandemic, the perspective of many small- to medium-sized business (SMB) owners changed. Many smaller firms may have kept their roots in brick-and-mortar operations — and then moved online.
Robert Clarkson, chief revenue officer at Payoneer, told PYMNTS’ Karen Webster there’s been a shift in how smaller outfits, even sole proprietorships, come to market. By and large, SMBs have had to embrace a digital-first strategy, with an eye on the global stage and multiple channels.
“What we are seeing now is that businesses are starting from Day One as online only, [and only later] gravitating toward a more local presence,” he said.
While small businesses used to start locally and later pursue global growth, many are now jumping into the international marketplace from the start, pursuing consumers across multiple direct and marketplace channels. With walk-in traffic sporadic in their home markets due to the pandemic, they have had to invest more than ever in their digital strategy.
“Businesses need to be found,” no matter the market, Clarkson said. That means investing in digital advertising, online storefronts and social media. But in an age of increased cross-border commerce, expanding one’s customer base often leads to increased complexity and localization demands.
Related: Payments Orchestration Playbook: SMBs Embracing Digital Payments Framework
Catering to an Expanded Base
Clarkson said that SMBs must cater to their expanded customer bases by featuring multiple languages on their sites and taking payments across multiple currencies.
“If you are a SMB, you need to be able to present to a U.S. buyer, a U.K. buyer, a buyer in [Vietnam], in their own language and currency to make sure you are relevant,” he said.
That same reach and breadth is important as the gig economy grows and smaller shops build their businesses to market services internationally. The issue is that many of these smaller firms may not have the technical know-how, or resources, to be able to accept those currencies and rival the capabilities of larger firms. After all, payments schemes differ from region to region, or even country to country within a region.
Providers, in turn, must be empathetic to the limited resources that an SMB has — and must provide an intuitive and streamlined onboarding experience, along with an easy-to-navigate interface.
Clarkson said that outsourcing that payments functionality to providers — Payoneer among them — can make it easier for SMBs to bill and collect in multiple currencies and in multiple geographies, leveling the playing field between SMBs and their larger brethren.
Outside payments providers, he said, also increase the probability that payments will be authorized and routes optimized to make sure that transactions are completed.
It’s important to note that companies like Payoneer also conduct critical know your customer (KYC) processes in a digital environment where unknown buyers are interacting 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 vetting process takes place and the conversion rate increases.”
See also: 88% of Businesses Selling on Marketplaces Receive Payouts Through Them
Platforms Smooth the Rough Edges
FinTech platforms can help bridge the gap between the complex challenges facing modern digital businesses and the capabilities of the largely-analog financial infrastructure. This includes everything from enabling an array of KYC processes that vary by geography, settlement and conversion rates optimization, better cash-flow visibility and fast access to working capital.
The latter is critical, Clarkson said, as traditional banks do not tend to be enthusiastic lenders to the SMB community.
Supply chain issues, which have dominated 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 markets in order to get and sell what they need.
Looking ahead, he said that SMBs are increasingly becoming global-first enterprises and seeking the widest possible geographic coverage as they capture new customers and revenue streams, including buy now, pay later options.
As Clarkson told Webster, “You have to ‘act’ global, but ‘look’ local.”
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