Small business: The next big battle in payments

PayPal’s just-announced push in-store in the US with its Zettle product is an indication of how payment-solution players are likely to compete to offer smaller businesses innovative payment solutions as they emerge into the tough, post-pandemic commercial landscape.

PayPal will offer point-of-sale hardware and other services in the US, like invoicing, to businesses ranging in scale from small coffee shops to medium-sized shops, in direct competition with the likes of Square, Fiserv’s Clover and other big payment players. 

The details

• PayPal has long aimed its services at businesses of all sizes, helping them accept mobile and online payments, and has seen opportunities during the pandemic and the trend towards contactless payment, to move into big chain stores through the use of QR codes.
• The lines between e-commerce and bricks-and-mortar commerce are increasingly blurred and harder to define – is a store that is used mainly for pick-ups of online sales an e-commerce business or a physical one? 
• Payment solution players need to be flexible enough to straddle all payment channels and accommodate small sellers, whether they are taking payments online, swiping a card at a counter, or offering a check-out cart on a website.
• Small businesses are also engaging with platforms such as Shopify and Etsy to allow them to digitise sales and payments. These bring in solutions offered by the likes of PayPal and Stripe, which can link with platforms to provide payment work behind the scenes. This makes relationships between payment players and platforms even more important than with small businesses when it comes to capturing market share.

Key takeaway

Small businesses offer anything but a small market for payment players. Bernstein analyst Harshita Rawat estimates aggregate sales by merchants under $100 million in yearly sales represent a $4 trillion market in the US.

Sourced from the Wall Street Journal