Many shutdowns that government officials ordered in response to COVID-19 didn’t impact essential services to consumers such as home repair and maintenance, automotive service, electronic repair, or laundry services. Although these businesses were permitted to continue operations, as Chris Yurko, Director of Business Development at First American Payment Systems, points out, “Most had relied on face-to-face interactions in the past. Through the coronavirus crisis, they realized they need a better way to engage.”
Before the pandemic began, some consumer service businesses had implemented solutions, such as SMS messaging or scheduling software, to engage with their customers digitally. “But many never thought out the payments piece,” Yurko says.
Yurko says after the pivotal events of 2020, consumer service businesses that dealt primarily in cash will need to rethink the payment experiences they offer. “We all know how frequently currency can exchange hands making it quite unsanitary,” he says.
Customers may prefer — and expect — to be able to make digital payments, conveniently and at a distance. “Customers are now making online payments to socially distance, and that habit will last past this crisis,” he predicts.
Must-Have Payment Solutions Features for Consumer Service Businesses
Many software developers are looking for a payments platform to integrate with their software or app, and Yurko says there is an immediate need for payments acceptance and First American offers a more immediate path to success. While software developers are completing their integration, First American’s non-integrated solution gives merchants the flexibility to have a branded, customer-facing payment page. He comments that if your clients need card-not-present payments acceptance now, they can have their branded online payments page set up at no fee — and with no development expense.
Yurko adds that clients who avoided digital payments because of payment processing fees now have options. First American’s platform supports a non-cash adjustment program. This allows business owners to add a service fee (usually about the amount of payment processing fees) to all transactions and remove it if the customer pays with cash. In effect, payment processing fees are covered.
The Added Benefits of Digital Payments
Upgrading to digital payments also gives consumer service businesses the opportunity to move to a recurring billing model. For example, landscapers who provide monthly lawn care, and perhaps snow removal services in the winter, can give their customers the option of paying one predictable payment each month to cover all services. Likewise, an HVAC business could offer a plan in which they schedule routine maintenance and filter replacement and bill customers automatically.
“Customers never have to think about it again,” says Yurko. “It’s just taken care of.”
A subscription model also helps make accounts stickier and build a predictable revenue stream for the consumer service businesses. “Subscriptions put your merchants in a good position. They have more resources and liquidity to help them grow,” Yurko says.
Another benefit of digital payments is the data that consumer service businesses can collect and analyze. Instead of pouring through paper records and receipts manually, payment data can provide owners with greater visibility into their businesses and customer patterns and behaviors. That insight now, says Yurko, is particularly valuable. “With limited income, what people are spending money on is most important to them. It’s important information to collect. It can help businesses shape buying decisions that people will make in the future,” he says. “A lot of SMBs will win from this in the end.”
Yurko says software developers and ISVs may find that their prospects are taking a wait-and-see approach when it comes to new technology until they have a better understanding of how life will change post-coronavirus.
Still, others are looking for ways to keep their businesses going and weighing options for the future, but you’ll have to convince them to invest. “Companies will probably become leaner in the short-term. Business owners and employees will have increased responsibility in their roles,” he says. “You are going to have to convince them of value before they’ll commit.”