Friday, 27 September 2013

Is the future of shopping, T-commerce?

Recent reports show that UK shopping habits are changing and we are now making more and more purchases not on the high street at the weekend but sitting in our lounge.

With the increase in internet enabled TV's, the television is entering an entirely new era, with additional opportunities for advertising, marketing, revenue generation, and viewer participation.

A recent report from Conlumino suggests that up to ¼ of UK consumers will make online purchases from interactive TVs before the end of 2014, this is known as T-commerce.

T-commerce allows TV-viewers to respond directly to offers delivered on their TV screens, and instantly purchase products by using their existing remote controls and set-top boxes. But T-commerce goes further than just selling products via the television. With the additional customer interaction that you would not get from any other channel, you can get instant feedback from the viewer meaning an immediate response for the merchant. You can also deliver additional information on products, services or events directly from the content they are watching on the television.

The television is becoming a powerful commerce channel enabling merchants to sell over television and a lower cost than before.

To help stay ahead of the curve and develop an e-commerce platform ready for T-commerce, we recommend:
  1. TV apps
    Many of the Smart TV manufactures now offer software development kits (SDKs) enabling developers to create application designed for the TV. With this ability to develop applications merchants could create extensions of an online catalogue, greater social sharing experience, video-content marketing, or even games that introduce users to a their products.
  2. Responsive design
    Responsive design is a website philosophy and technique focused on giving users the best possible experience relative to their device — be it a smartphone, tablet, or desktop computer. With much of the focus for responsive design to work on small device screens, merchant websites should now also focus on the larger HD TV screens to optimize a website for television viewing.
  3. Piggyback on existing marketplace
    Many of the large marketplaces, like eBay or Amazon, have already started to enter the t-commerce space, therefore to get you started place some of your products on their marketplaces and piggyback on their system like the  “Watch with eBay” application.

Friday, 19 July 2013

Online Fraud: Is Your Business Safe?

As the internet continues to develop into the most viable channel of commerce for many businesses, the risk of payment fraud remains to be a growing concern. Risk of fraud may be more evident in businesses that offer higher-value products; however, fraudsters don’t usually discriminate, which makes all online businesses potential targets. This can create serious financial repercussions for your business; with fraud estimated to cost an average of £500 per year and in some cases as much as £25,000, according to a recent E-business Benchmark Report.

Utilising the latest fraud screening tools is imperative as your business will be held liable for any fraudulent transactions. UK businesses use a range of different tools to combat the various cyber fraud threats including: card verification value (CVV2), 3D Secure, and address verification system (AVS). When searching for a merchant services provider, look for these tools to be included in their offering.

Incorporating the above fraud screening tools into your payment processes can help shift the liability of fraudulent charges to the customers’ card issuer. Otherwise, your business risks losing money to chargebacks from the customers issuing bank. Despite chargebacks being relatively inexpensive, too many can result in either increased merchant account rates or being dropped by your merchant services provider altogether.

To protect your business and customers from fraud, here are five key things to consider:
  • Adhere to the PCI Data Security Standards. These standards provide the structure, support, and materials for handling cardholder information and developing a secure transaction process. Your merchant services provider should be able to assist your business in becoming PCI compliant.
  • Incorporating a 3D Secure check into the transaction process. 65% of fraudulent transactions in the UK during 2011 occurred when the card was not present, and businesses had no way of verifying the person making the transaction is actually the card holder. 3D Secure requires online shoppers to input a password which provides an additional level of authentication
  • Cross-check the given telephone number and delivery address with the billing address. This can be done through an address verification system (AVS) or other third-party systems (e.g., Equifax, Avoid shipping to an address that is different from the billing address.
  • Manually review unusual transactions to identify if they may be fraudulent. Common cases include:
    • Purchases that vastly exceed the average value of your businesses’ normal orders
    • Requests to ship orders outside your own country
    • A customer who orders more than once in a given day
    • A customer who refuses to confirm their credit/debit card and billing address details
    • An existing customer who suddenly orders a substantial volume of goods
  • Display details of your returns/refund policy on your website. Honour the policy, and respond quickly to customer queries. This could help your business reduce the number of disputes and chargebacks you may receive.
Whether your business uses the internet as an additional sales channel or is solely e-commerce, the above considerations will help your business mitigate the risk of fraudulent transactions. It will also ensure that your customers’ credit/debit card and other sensitive information will be safeguarded when making a transaction. Take careful consideration in choosing your merchant services provider as they should be an effective partner in reducing fraud and helping your business grow.

Friday, 28 June 2013

How to Take Control of your Cash Flow

With British businesses being hung out to dry when it comes to the recurring issue of late payments, it’s no wonder that hopes continue to fade for recovery of the current financial climate. Legislation to reduce payment terms and bind in the contracted parties still doesn’t formally or legally exist, and has adversely affected the cash flows of businesses all across the UK.

A recent survey by BACS Payment Scheme found that 44% of SMEs are currently experiencing issues with late payment, waiting on average 38 days for payment after the agreed terms. With the recovery from the recession widely reported to be hinging on the prosperity of UK SMEs, these issues must be resolved before we continue to see more downward pressure on everyone’s margins.

So how can businesses become proactive towards handling payment issues? Signing up to the Prompt Payment Code, which is a government scheme of commitment to timely payment and encouragement of best practice between organisations and their suppliers, would be a good place to start. However, more can be done by individual businesses to implement the aims of the payment code.

How can this be achieved? Provided below is some guidance that will help your business improve its own financial position and speed up cash flow:
  • Commitment to the best payment practices outlined in the Prompt Payment Code will put pressure on large suppliers to change their buying behaviour and minimise the bargaining power they currently exert over SMEs.
  • Consolidation of payment services through a single provider will speed up settlement times and reduce the hassle of managing multiple relationships and reconciliations.
  • Selecting a merchant acquirer who prioritises prompt settlement of funds from card payments will enable your business to access those funds more quickly.
  • Using an electronic invoicing service can be far more efficient than traditional paper invoicing for both you and your customers to make and receive payments. Invoices can be settled instantly online, allowing your business to get paid faster.
  • Ensure that your business has the ability to accept payments through your customer’s preferred payment method. Electronic payments are fast becoming the norm, so it is important that you possess a variety of payment acceptance facilities.
Amending your businesses’ financial processes in conjunction with the aforementioned guidelines will boost your cash flow and inspire confidence in both your customers and suppliers. Certainty of payment is essential for staying afloat in this time of recovery, and will create numerous opportunities for growth throughout your supply chain. If you are to prevail through these rough economic times, your business must be proactive in creating a positive change in the way payments are handled and processed.

Thursday, 20 June 2013

Business Support – are you feeling it?

One of the biggest aspirations for most businesses is to grow. This at times can seem like an unachievable task, especially in a climate fraught with barriers and limited support. So the question I ask is, does there need to be more support to help guide businesses through the murky waters to growth?

It is clear when speaking to businesses that there is a definite gap in the providers of support and advice being given to SMEs. If you need business advice and guidance, where do you go? The banks, who have traditionally been seen as a reliable source of business support have reduced the decision making power of their bank managers, - or in some cases removed them altogether - leaving businesses to fend for themselves when it comes to sourcing the right financial services for their businesses.

Just one example of this, which highlighted the issue of awareness, or lack thereof, of government lending schemes, came after a conversation with Alan Todd, Director of Cambridge Business Advisers. He made a very good point that “There’s still little knowledge of what Government schemes can offer. Despite all the money that is going into the various schemes there has been little promotion of the schemes themselves. The two examples of Start Up Loans and grants to manufacturing companies – often SMEs are totally unaware these exist. Going back a few years, organisations like Business Link and its advisor network would have been advising local companies on what support was available. Business Link has now all but disappeared; it’s just a website. The Department for Business, Innovation and Skills now has to consider how they communicate with SMEs.”

This just goes to prove that even in an area as crucial as advice on sources of business finance, there is a serious lack of knowledge share transferred to businesses. This is seen right through to lack of more general business advice, with a recent FSB survey showing that 37% of businesses go to friends and families for support and guidance, as they don’t know where to turn. Of course, the people they’re speaking to are likely not trained professionals with vast years of experience in managing and running a business, so are usually not the most reliable source of information!

There are however some companies who are seeing this unnecessary and potentially fatal gap for businesses and filling the void. Just one example is the business advisory group IBD who offer a full business advice service for businesses of all sizes. These type of companies are going to be crucial in not only providing support for businesses now, but also in bringing about change at a higher government level to ensure businesses are better served in the future.

CashFlows is also stepping up to the plate by creating a Business Growth Guide. This is full of information and top tips for online business or those thinking of using e-commerce as an additional sales channel. Check out the business growth guide here.

It is clear that more needs to be done to support businesses in their struggle for growth, and offering useful and intuitive advice is what is desperately needed. The government has the power to change and improve the support system for businesses, and this needs to be a priority, or the economic growth targets will not be achieved.

Thursday, 13 June 2013

Putting The Brakes On British Business

I wrote a blog last month that spoke about the unnecessary friction within our industry and the simplicity that all of us who shop online crave. Having taken some time to think about this, I’ve come to realise that this friction isn’t just for consumers but is also prevalent for businesses in their dealings with financial services providers.

Let me give you one example. A new business wanting to sell online will require both a merchant account (for accepting card payments) and a business bank account. Simple? However, all but one of the banks have sold off their merchant account divisions. So what impact does this have? Well, it means two separate application forms (most likely paper), two sets of separate correspondence to keep up with and (more often than not) two, three, four, five, even six weeks before their accounts are approved and you're ready to trade. Throw in a web developer, accounting software a shopping cart and that’s enough friction to start a bonfire!

Once up and running, things don’t get any easier. You start growing and see a potential customer base in Europe, so want to open a Euro account. Repeat the above process all over. You want to integrate your expense reports and payroll into your banking? Best of luck, you’ll need it! Want to see the sum total of your business transactional activity in one place to save you time and hassle? You’d better be good at Excel or know someone who is!

I’ve previously written about new entrants into financial services and the success they’ve had in shaking up the market. One of the inherent advantages these providers bring is the speed at which they make decisions and can adapt to business’s needs. Clearly there are regulatory requirements that cannot and should not be avoided in setting up and managing business bank accounts. Sometimes though, innovation should be simply about solving the real issues that customers have, rather than creating solutions to problems that don’t exist.

Consolidation within the UK financial services industry has caused many of the banks to sell off their merchant account division together with other services deemed peripheral. Unfortunately the requirements to source these same services remain identical for businesses wanting to trade online. Business owners have no real love for their financial services provider – and after the last five years, who can blame them? – but it’s difficult to disagree with the argument that they are being short changed by cumbersome processes and legacy systems that at best are an irritant and, at worst, result in unnecessary friction turning into the brakes being clamped onto a business’ growth.

Any financial service provider who can remedy these issues truly would be innovating.