FinTech Solutions Every Small Business Owner Needs

By Martin Hegelund, CMO and co-founder, Ageras

After two years of social distancing, consumers have come out of hiding and gotten back to shopping, dining out and booking flights and hotel rooms. This year should be a boom time for the small businesses that serve these customers, but a recent Clarify Capital survey of 500 small businesses in the U.S. revealed that more than half are struggling to keep their doors open, and 17% are worried they will go out of business this year.

Many smaller brick-and-mortars are still recovering from the near-death experience of public health mandates that kept customers stuck at home and doing the bulk of their shopping online. These businesses should be making up for lost time now, but high inflation, interest rate hikes, supply bottlenecks and a labor shortage are threatening the bottom lines—and even the existence—of many.

This will be a year when small businesses examine every aspect of their operations and craft new strategies to accomplish more with less. And it is especially important that they do, because there is yet another challenge they will need to rise to this year: serving consumers whose behaviors and expectations have changed dramatically.

Where, when and how consumers pay for the goods and services they want is among the biggest changes. Unlimited choice and flexibility are the order of the day.

If small businesses are to effectively serve today’s customer, they won’t be able to rely solely on the banks and credit card issuers that created the rules of the road years ago. They will need to fully embrace new financial technologies that can automate manual processes, help them better understand their customers and bring the kind of speed and flexibility to payments that consumers now expect.

While every business has unique needs and should choose their FinTech solutions accordingly, there are several must-haves for any business that aims to keep up with the times and even flourish in what could be a difficult year:

Connected accounting software

If your company’s accounting software is not directly linked to the bank you use for business purposes, you are perfectly outfitted for yesterday’s pace of business, not today’s. The system you use should feature deep integrations with banks, payroll providers, expense management programs and everything else that’s critical to the financial health of your business.

Every worker you employ and every customer you serve is digitally connected to their bank, to their home, to their employers and to one another. They expect the same from any business they patronize.

Accounting software can be the financial cockpit of the business. Using outdated methods and accounting tools means you are at risk of crashing the plane.

Payments flexibility

The good news today is that consumers are able and willing to spend. But thanks to e-commerce, online shopping and other innovations, they expect a range of options when it comes to how they pay. The volume of cashless payments is expected to reach $1.9 trillion by 2025, analysts say, and will grow exponentially from there. And alternative payment methods are growing in tandem.

New financial technologies can help any business accept new payment methods. Depending on where you are in the world, customers expect to pay via text message, QR code or tapping a smart phone on a payment terminal. It’s becoming increasingly common for consumers to pay later for goods and services they acquire today, and even to pay in cryptocurrency.

American businesses don’t need to embrace every possible form of payment, but it is time to move beyond credit, debit and cash. It’s time to enable e-commerce, sign up with PayPal and eliminate fees, delays and other barriers. New financial technologies make it fairly simple to do so.

Challenger banks and new tools

If your business and your customer base are global, you might run into obstacles if incumbent banks are your default for all things financial. That’s why many global businesses work with challenger banks, which are financial industry upstarts using new technologies to offer services that would be expensive or unwieldy when working with traditional banks.

Another strategy is finding FinTech tools that simplify some critical processes. International money transfers, for example, are easier and far cheaper when working with a FinTech company like Wise. And if your company is a startup looking to eschew bank loans and pursue alternative financing, companies like Pipe can make the process far less time-consuming.

New financial technologies are on the rise, and this is fortunate for businesses of all sizes. Consumers today want the kind of flexibility that would have been undreamed of just a decade ago. They expect to pay when they want, how they want and where they want.

And in a tough economic climate, giving people what they want might just mean the difference between success and failure.