Multichannel selling is a reality for a majority of small-to-medium sized merchants, but payment processing capabilities lag far behind, according to a new research study commissioned by SecureNet Payment Systems. The study, conducted in partnership with First Annapolis Consulting, evaluated the degree to which small-to-medium sized merchants conducted business through multiple sales channels, in order to assess not only how the merchants currently process payments, but what needs weren't being met by their payment providers. The research study is available for download at: www.securenet.com/merchantsurvey2013/.
More than 60% of merchants surveyed already accept payments in more than one channel, but these merchants are not well served by the payments industry today. A key finding is that in many cases, each new selling channel requires a different payment provider; in fact, 27% percent of merchants surveyed had three or more payment processing software solutions to facilitate payments by channel. Because of the ineffective implementation of a payments strategy through a single, omnichannel payment processing provider, merchants struggle with unnecessarily complicated reporting, complex reconciliation processes and ineffective transaction pricing structures.
Small businesses identified the two most important issues regarding their multi-channel payments as:
- Access to reporting that is easy to understand, and
- The ability to easily understand how cash flows across channels.
Additionally, nearly 50% of single channel merchants anticipate implementing multi-channel commerce in the next five years. Among single channel merchants contemplating a multi-channel strategy, the three issues ranked most highly (important or very important) were simple technology (49%), easy integration with existing technology (46%), and a single solution for all of the merchant’s payment needs (41%). Lower pricing came in fifth, with 39% of single channel merchants indicating it was important or very important in a multi-channel solution.
Large multi-channel merchants naturally face different challenges than small merchants:
- 64% of merchants with sales above $5 million report inventory control as a large or very large issue compared with 35% of small merchants.
- 45% of large merchants indicated that facilitating a consumer purchase in one channel and a return in another channel was a large or very large issue.
Likewise, large, single-channel merchants have a different set of concerns than their smaller counterparts regarding the implementation of a multi-channel solution:
- 71% indicated that strong technical support would have great impact on their desire to implement a multi-channel solution versus 38% of small merchants.
- 57% identified reconciliation tools as being a key to multi-channel commerce versus 27% of small, single channel merchants.
- Nearly half indicated that integration into the merchant’s other payment solutions would have a very substantial impact on their ability and desire to implement a multi-channel solution.
"This research study confirms that traditional, single channel payment partners are simply not fulfilling the needs of a large segment of American businesses,” said Brent Warrington, CEO, SecureNet Payment Systems. "The successful multichannel SMB will look for not just a payments processor, but a technology partner that can scale with a merchant as business needs change. A truly omnichannel payments solution offers multichannel merchants the most effective way to streamline payments across all channels with improved ease, speed and costs. As merchants demand better solutions, the payments industry will see more widespread change."