Payment methods are constantly evolving, and to meet the expectation of customers in today’s omni-commerce world, small businesses want to offer services such as mobile app payment processing and text-to-pay — and need a trusted provider to make it happen. What better partner than their credit union?
Research shows that small businesses overwhelmingly prefer to have all their banking and credit needs met by one financial institution. According to BlueVine, nearly nine out of 10 small businesses (87%) consider it important for a single provider to handle their credit and banking services. Additionally, a recent study by J.P. Morgan and Forbes shows that 52% of executives plan to consolidate their treasury and payment service providers.
Credit unions can assist businesses meeting their goals by partnering with a reputable payments provider to offer merchant services. This partnership will increase customer satisfaction, retention rates, competitive differentiation, and, ultimately, level the playing field with larger regional and national banks.
What Capabilities Local Businesses Want
Broadly speaking, merchant services enable businesses to accept and process electronic payment methods. The emergence of omnichannel commerce, where the payment process can happen online or offline, and the ability to accept payments virtually and in-person are now integral functions of a small business. Credit unions must recognize that offering small businesses a credit card terminal, competitive pricing, and timely deposits is no longer enough.
According to a recent survey by Paysafe, 52% of customers at 65% of businesses want more payment options. These can include methods beyond credit cards, such as cryptocurrencies (decentralized digital currencies) and digital wallets that store payment information and passwords.
Offering streamlined services is foundational in today's business ecosystem. When the small business owner views the credit union as a business partner, it creates strong, long-lasting member relationships. Companies that use their credit union for their merchant service needs will also bring in more revenue for the credit union. Elavon, a leading payments provider and credit union merchant partner, shows an 88% increase in average revenue, an 85% increase in deposits and an 80% increase in loans from businesses that use their local financial institutions, including credit unions, for merchant services versus those with only a checking account.
Working with a third-party payments provider is an opportunity for credit unions to provide their members with the type of all-in-one services they’re looking for. It can also be a tool to engage prospective members. For example, many payments providers now offer a broad range of services beyond traditional payment processing, including:
Sophisticated payroll management
According to the Paysafe study mentioned above, 53% of participants rank reliability as the top priority for American small- and medium-sized businesses (SMBs) when selecting a payment provider. Followed by:
Fraud management (29%)
Ease of integration (28%)
Types of Models And Evaluation Criteria
A credit union’s success in becoming an all-in-one financial solution for its members is directly tied to the performance of its merchant provider. The strengths and limitations of a potential partnership will positively or negatively impact the relationship between the credit union and its small business members.
Merchant providers work with financial institutions in a range of models. Each offers varying degrees of ownership, flexibility, and associated economics, but all are focused on strengthening the value of a credit union’s services.
When exploring potential merchant services providers, credit unions should consider the following as guideposts for determining the viability of a payments provider.
Cash flow and currency
Risk management and compliance
Download the full whitepaper for further details supporting each guidepost. No matter the model, a strong partner gives small business owners ways to increase revenue, process orders, and manage inventory while meeting their customer’s expectations securely and risk-free.
If your credit union is exploring how to expand your offerings through payment process and merchant services, we encourage you to read more here or reach out with any questions.
Elan Advisory Services
Elan Advisory Services partners with financial institutions to grow their business through our outsourced credit card program, mortgage solutions, and our all-in-one merchant processing business solution platform, talech®. Our dedication to our partners, growth philosophy, and investment in evolving technology has made us a leader in the industry since 1968.In a world of rapidly changing digital technology, increasing compliance burdens, and competing rewards programs, more have turned to Elan for innovative solutions. For more information, visit https://www.elanadvisoryservices.com/.
Elavon is a leading global payments company with more than 4,300 employees and operations in 10 countries. A subsidiary of U.S. Bancorp (NYSE: USB), Elavon provides businesses with the technology needed to accept payments from customers, whether they are shopping in stores, at home, or on the go. Its platform is distinctive in that it is common across countries, making it easier for businesses to get their payment systems up and running quickly and securely. Visit Elavon at www.elavon.com or follow Elavon on social media to stay up to date with company news.
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