Contactless payment processing: A win-win for small businesses and financial institutions

Small business owners are looking for easier ways run their companies – especially in today’s virtual world where customers demand contactless payment options. As reported by Fortune Business Insights, a recent Mastercard survey reveals that 79 percent of consumers globally are using contactless payments during the pandemic. The report also states that consumers plan to continue using these payment options post pandemic.

Unfortunately, many business owners are turning to non-bank competitors such as PayPal or Square to process contactless transactions. But in solving one problem, these business owners unwittingly create another for themselves: Decreased cash flow from customers as payments sit in virtual wallets – sometimes failing to transfer to existing deposit accounts with your financial institution (FI).

The good news is that, as an FI, you can be the hero who saves the day for small business owners who’ve become disenfranchised by the entire contactless payment experience. With embedded banking resources that offer integrated merchant processing, you can support your small business customers in establishing stronger cashflow and payment acceptance programs while protecting and growing your valued relationships. And the bonus? You’ll be in a stronger competitive position to attract new customers.

If you’re new to the embedded banking concept, think of it as “banking as a service” by a service provider. In other words, a third-party software company embeds day-to-day banking experiences into an FI’s existing application and handles the regulatory burden. The new software integrates directly with the FI’s other software applications. The software company doesn’t compete with the FI. Rather, it partners with you.

Embedded banking services empower FIs to offer numerous benefits to their small business customers such as faster cashflow from transactions, and the ability to reconcile and track transactions – all with one tool.

FIs Win, Too

Integrated payment processing can help your FI not only provide a value-added service to your customers, it also can help you monetize your customers’ transactions. A study recently completed by Autobooks, which examined a cohort of SMBs from a bank that launched the Autobooks payment acceptance platform, revealed that, within nine months of launch, usage of the platform grew 347% while usage of third parties for payment acceptance declined 77%. In other words, the bank successfully displaced third party competitors and increased its ability to better serve and monetize small business customers.

The best-in-class embedded banking technology goes further than providing just a product. It also offers industry research and customer insights that FIs can leverage to generate additional value through other, more traditional banking products and services – all so you can better compete against emerging fintechs and fintechs-turned-bank.

From the actual hardware and equipment used at point of sale to the software that ensures timely distribution of funds owed to the business owner, Fitech by Deluxe sets itself apart from other embedded banking providers by delivering leading-edge payment technology and an in-house team that supports business banking customers after the sale.