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Expert opinion

There is no one-size fits all for the Small Medium Enterprise market

Thursday 16 August 2018 | 10:37 AM CET

AEVI specialists describe the wide array of options available for SMEs for handling their financial, payments, and security needs.

Anyone who works in the Small Medium Enterprises (SMEs) market knows that there is no one-size-fits-all. Yet a piecemeal approach to solving SMEs’ deficiencies or enhancing their capabilities has defined the nature of the fintech industry of late. SMEs make up a large part of the market that fintech companies and banks are looking to capture. SMEs now have an astonishing amount of choice when it comes to payment and business solutions. However, is this a good thing?

For all of its efficiency improvements and capabilities, an overload of solutions supported by great marketing efforts and mixed messages can leave the SMEs with too much choice and/or information. Solution proliferation, centralisation and security are three elements to combine to best support the SMEs market in the digital transformation.

Solution Proliferation

In 2016, there were 200 billion financial app sessions globally across iOS and Android, according to data from App Annie. As financial services apps have grown in popularity with SMEs, so has the volume of apps on the market. A plethora of fintech and business apps may well present merchants with too much choice. The effort needed from businesses to research and decide what is best for them is time-intensive and costly. What SMEs really need is a partner to harness its knowledge and understanding of their business and vertical, whether that is hospitality, groceries, beauty or entertainment. A thorough knowledge of the challenges faced by each SME type, coupled with industry knowledge creates a prime advisor position to help SMEs choose the solution they need. It is logical to search from a repository of solutions centralised into a single place.

Centralisation

Centralisation brings with it its own set of advantages. Centralisation gives access to an expanded number of offerings dedicated to SMEs. A centralised system containing all the apps, very similar to what various app stores do for consumer apps, allows exploration of the new and innovative capabilities of the many fintech and business apps out there, instead of being bound by a limited solution. This allows the creation of an offering for SMEs that will let them seamlessly integrate all of their systems, from inventory management to employee management, loyalty programmes and point-of-sale solutions.

Integration of these apps into the SME’s business life means they would interact with payments systems; drawing data for analysis and improvement, therefore security on both hardware and the centralised system needs to be maximised.

Security

Of course, wherever there is a marketplace of apps and services, there is a need for security. In 2017, Google deleted a mammoth 700,000 apps from its Play Store for being harmful or deceiving in some way, which is a 70% increase from 2016. Due to its relatively open nature, Android is a target for scam developers and they have intensified their efforts recently. This lack of security highlights the need for vetting and providing only trusted solutions to SMEs to reduce the need for them to perform due diligence. A centralised system populated with only trustworthy apps and providers gives merchants peace of mind.

Who would help in this case?

With an entirely open ecosystem of solutions at their fingertips, the merchant bank, acquirers and ISOs are in a good position to appropriate it for themselves and tailor a bundle of solutions according to their merchant’s needs and the needs of their customers.

As there is no such thing as one size-fits-all, and every SME is different in its set of needs, SMEs can benefit from having merchant acquirers selecting the bundle on their behalf. Given access to a centralised platform of apps through their bank or merchant acquirer, an SME is no longer limited by its own fragmented solution and the time required to sift through the glut of apps on the market.

Compared to fragmented smorgasbords of individual solution providers, this is a drastic
improvement as SMEs receive guidance on how to make their payments and business
solutions work for them.

Centralised platform ecosystems of fintech and business apps offer merchant acquirers the chance to discover solution providers in the context of their SMEs’ needs. They create their own tailored bundles from a vetted selection of suppliers and make their purchases. This means that merchant banks can use their insight into what their SME customers value and adapt their products and strategies accordingly.

What a public app store may offer in terms of freedom from third-party control; centralisation through an open ecosystem makes up for with the freedom that comes with third-party innovation and choice, but with the security of a centralised platform. Flexibility and ease of integration means that merchant banks and acquirers can offer an optimised, tailored solution for their customers, so they can better understand and cater for their SMEs. That makes it a win-win for merchant acquirers and SMEs.

About AEVI

AEVI brings acquirers closer to their merchants, and merchants closer to their consumers, with an open ecosystem that combines value-added apps, payment services and a multi-vendor selection of payment devices. Using AEVI pick and mix solutions, the acquirer creates differentiated and innovative point of sale solutions under their own brand, tailored to different merchant types and taking into consideration their specific needs.

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