If you’re a small business, you’re missing out on a generation-sized customer base

If you’re a small business, you’re missing out on a generation-sized customer base

Attention, Small Businesses: There’s a Generation-Large Customer Base You Haven’t Reached. Generation X is about the same size as this market.

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The small businesses in the US

When it comes to small businesses in the United States, we’ve been underestimating their willingness to take risks, according to the findings of COVID-19.

America’s micro businesses have adapted fast since March 2020, relocating their company online, providing new products and services, and expanding into new areas.

It appears that the risks have paid off

They look to be paying off, at least so far. Retail sales in the fourth quarter of 2020 were 6.9% higher than retail sales in the fourth quarter of 2019.

Online sales, climbing 32% from the previous year, were the driving force behind this expansion.

Inventions are born out of necessity

It is possible that opportunity is the father of invention, if necessity was the mother.

As a result of fear of risk and a series of restrictions limiting how businesses take payments, a market potential that may prove as significant as internet sales has been overlooked by many merchants.

How does America do banking

For the 2020 “How America Banks” poll, 6 percent of American families were unbanked, meaning that no one in the household had access to checking or savings accounts.

16 percent of Americans are now considered “underbanked” by the Federal Deposit Insurance Corporation (FDIC), which means they have a bank account but also use services like prepaid credit cards or check-cashing.

It’s unclear how huge the potential market is

It’s unclear how huge the potential market is. Approximately the same number of people as in Generation X are without access to formal banking services (65 million). How do you feel about abandoning an entire generation of customers?

However, too often, businesses are able to get away with it. You can tap into this loyal client base by making the effort to learn how they make purchasing decisions and providing payment options that are tailored to their preferences.

Misconceptions of Small Business Owners

One of the reasons small businesses have not yet enthusiastically embraced financially excluded customers may be misunderstandings. If you don’t have a bank account, it doesn’t mean

• you only shop at bargain stores,
• you’re on public assistance,
• or you can’t afford to buy things.

Accepting these customers does not imply that the brand image that shops have worked so hard to establish would be weakened in any way, shape, or form.

As a result, many small business owners and customers take for granted the type of transaction that most unserved and underserved consumers are barred from making: strolling into a store and paying for what they want with a bank-issued credit or debit card.

It is not easy to be a small business owner

Small businesses have a difficult time serving unbanked customers because the financial services industry has made it difficult for them. To establish a person’s creditworthiness, banks have relied on antiquated algorithms.

There are a limited number of payment networks that can be accepted by POS systems.

Big retailers can see the chance/possibility

In order to take advantage of this untapped market, big businesses have had to walk across broken glass or force people to fill out invasive forms.

In the beginning, this might be a difficult and humiliating obstacle. “Sorry we can’t help you” is the most common response from small firms that have little resources and are limited to using out-of-the-box POS systems.

Taking advantage of inclusive technology

By thinking more inclusively about the payment process, small businesses can bridge the perceived danger of engaging financially excluded people with the reward of reaching 60 million prospective customers.

We are only talking about the United States at this point.

Several major retailers have already begun implementing

A number of prominent retailers have already begun welcoming consumers who are either unbanked or underbanked.

For the first time, Amazon and Wal-Mart are allowing customers to pay for things purchased online at brick-and-mortar storefronts via Amazon Cash and the Dotcom Store respectively.

Businesses of all sizes may take advantage of the growing variety of frictionless, discrete, and easy new ways to serve consumers who do not have banking accounts.

The unbanked and underbanked people

Financially excluded customers have adapted non-bank-based payment methods in inventive ways. Gift cards and prepaid debit cards, for instance, are increasingly popular for various kinds of transactions.

Banking on the go, which is common in places like China, is also on the rise.

Customers of Sprint and T-Mobile can now make deposits into their T-Mobile Money accounts at a number of well-known retailers. Debit cards are issued as well as interest is paid on the accounts.

Lease-to-own and buy-now, pay later services, both of which can be used in both brick-and-mortar and online stores, are increasingly being integrated by large retailers.

The pandemic has forced the small and local businesses

New payment methods have been introduced as a direct result of the epidemic. Four out of five businesses utilizing mobile payment systems like Square have yearly sales of less than $10 million, according to a new report.

Venmo, Paypal, and CashApp are all examples of peer-to-peer payment methods that more and more businesses are accepting.

The innovation Surge – helpful to small businesses

Small businesses don’t have to take on additional risk in order to access a market of financially excluded and unbanked clients the size of a generation. It does, however, necessitate a shift in business thinking.

Conclusion

A critical examination of the obstacles has been done. We erect for those who handle their finances outside of traditional financial institutions is long overdue.

Make an effort to incorporate more varied inclusive technology. It can aid in the conversion of clients and increase the profits of smaller enterprises.

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