Regardless of size, many businesses today face the same challenge: how to grow. For small and medium-sized businesses (SMBs) in Canada, the answer increasingly lies in technology.  Unlike large retailers, who generate 70 percent of their business from traditional brick and mortar stores, SMBs are seeing a larger share of their sales through e-commerce. In fact, over 35 percent of SMB sales came from e-commerce in 2018.

“Small businesses are quickly adopting new technologies and distribution methods to compete with larger retailers,” says Iain McLean, Senior Vice President of Market Development for Mastercard in Canada. “In addition to their leadership in e-commerce, they’re adopting contactless payments faster than ever — with contactless transactions at SMBs growing three times faster than large retailers in the past year.”

Small businesses are increasingly seeing the value of electronic payments, with new point of sale technologies and more merchants accepting electronic payments every day.  Some are ditching cash altogether.

Mustafa Yusuf, President and Co-founder of popular Toronto restaurant chain, FLOCK, says the reception to their cashless policy has been overwhelmingly positive.

“Our frontline staff love it,” Yusuf says. “There’s nothing worse than reconciling cash for half an hour at the end of a shift. But more importantly, customers love it too.”

FLOCK is using the time saved to engage with customers and gather real-time feedback. “We’re able to communicate with our customers a little bit longer at the cash,” Yusuf says. The positive response has led to the company’s newest restaurants going cashless as well.

Fraud protection and security are key to consumer confidence

Despite their adoption of e-commerce and digital channels, SMBs have not been as quick to adopt technologies to prevent fraud.

Fraud prevention tools are especially important in e-commerce environments, where customers are not present for the transaction. Large retailers have been relatively quick to implement fraud prevention technologies and as a result, have seen e-commerce fraud reduced by a third in the last year. However, small retailers are seeing fraud rates twice as high as those of large merchants. By implementing fraud prevention and authentication tools like Mastercard Identity Check, merchants can see a reduction in the cost and operational burden associated with fraud.

Business growth spurred by data and consumer insights

Small businesses are also turning to big data to better understand their customers. Big data used to be the realm of only the largest retailers, who had the resources to collect and analyse data from their customers. But that’s changing.

“Thirty-six percent of small and midsize businesses have adopted big data or analytics solutions compared to nearly 60 percent of large enterprise respondents,” says Dave Pearson, Research Director for Infrastructure Solutions at IDC Canada. “However, SMBs aim to catch up quickly, with an additional 16 percent planning to deploy analytics or big data within their organizations in the next 12-24 months.”

Pearson says due to resources, many SMBs seek third party expertise in designing and implementing these solutions.

“Our customers want payments solutions, but beyond that, they want help in growing their business,” says Jeff McGuire, Senior Vice President of  Global Payments Canada. “We’ve worked with our customers to develop a new Analytics solution, designed specifically for small and medium-sized businesses.”

Global Payments Analytics uses a business’ data and the power of Mastercard’s Local Market Intelligence (LMI) to deliver insights that help businesses improve decision making and answer key questions to understand their customers and competitors alike. LMI leverages anonymized and aggregated Mastercard transaction data to measure business location performance against a competitive set of similar businesses.

As a result, businesses are able to make more informed decisions, gain efficiencies,and grow. Which is the goal for any business, big or small.