How digital payment solutions can help banks compete for small business customers

In order to stay competitive amid digital transformation, small- and medium-sized businesses (SMBs) are adopting innovative technologies to bring their companies online. As these businesses become increasingly tech-savvy, they are embracing digital payments. Eighty-seven percent of business owners that started a company during the pandemic said that access to electronic payment options was important, according to the Small Business & Entrepreneurship Council—creating a valuable opportunity for banks that can enable this digital transition.

While Deluxe has seen growing competition for these small business customers, banks still play an important role in this digital ecosystem—companies still need things like accounts and loans. So, banks need to ensure they can offer technical capabilities that complement their offerings.

Today, there are more than 33 million SMBs in the U.S. Through trusted, technology-enabled solutions, Deluxe is helping connect these SMBs with financial institutions that can help them tackle their toughest challenges, from accessing funds faster to automating timely financial administrative work—ultimately helping get money into SMBs’ bank accounts faster. 

Deluxe has been servicing banks for more than 100 years. This experience has helped Deluxe understand the regulatory framework in which banks must operate, as well as the solutions they need to compete with fintechs.

With banks and their clients facing a growing array of choices, it’s critical that SMBs can offer value-added services that differentiate them from competitors. Deluxe allows financial institutions to embed its solutions on a white label basis—meaning branding can be customized for each institution—or integrate them into their banking platforms. Both options allow merchants to lower expenses, send payments and help reduce risk while equipping banks with the tools they need to compete with the more agile fintech startups that are also targeting small businesses. 

Access to these digital services will also be critical to SMBs as alternative payment methods grow in popularity and existing digital payment technology continues to evolve. In the U.S., the use of QR codes for electronic payments is predicted to increase by 240% from 2020 to 2025, while other options, such as cryptocurrency and blockchain, are also on the rise. 

This pace of change is potentially putting pressure on banks. But it’s also opening a lot of opportunities for fintech. With this is mind, Deluxe is working to evolve its solutions to meet new needs.

According to recent McKinsey & Company data, nearly nine in 10 Americans are now using some form of digital payments—and that trend is only expected to grow. For merchants, this means the ability to process digital payments quickly and easily is a top priority. To meet this need, Deluxe Merchant Services provides everything from the actual hardware and equipment used at the point of sale to the software that ensures the timely distribution of funds due to the business owner. Deluxe also offers a full suite of accounts receivable automation tools that empower customers to make smarter decisions quickly. 

These modernized payment solutions also eliminate reliance on checks and paper-based methods that can require greater costs and more effort to process. They also allow important payment data, such as invoice details or other contextual information, to travel with each payment. 

Digital processes are further streamlined through solutions like the Deluxe Payment Exchange platform, a fast, easy, low-cost solution that allows companies to send payments instantly. This helps businesses reduce their costs, speed up payments and increase operational efficiencies overall.