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The days of simply operating with a cash register and credit card machine on the counter are long gone, said Matt Good, senior vice president and general manager of Elan Advisory Services, U.S. Bank.

Nowadays, a digital storefront, eCommerce website or connection to a delivery platform is a must. The brick-and-mortar business must leap to an omnichannel world.

As Good told PYMNTS, smaller merchants have had to “dramatically change — literally overnight — the ways in which they operate and accept payments.” And most of them have pivoted to embrace and offer more payment options to their end users.

Those end users, he said, have been shifting their payments preferences and have found comfort and convenience in using tap-to-pay, mobile wallets and even text-to-pay options, which in turn have changed in-person experiences with their chosen merchants.

Restaurants offer a microcosm of the changes afoot. They’ve met consumers’ safety and health concerns head-on, with menus tied to scannable QR codes and point of sale (POS) available at the table.

Increasingly, smaller companies have had to look to merchant partner providers and their community banks to act as consultants to work through the new capabilities needed to meet new consumer expectations now — and in the future. These small to midsized businesses (SMBs) want to craft loyalty programs and rewards that can be offered to consumers in context.

“The consumers,” he said, “are basically saying that they want quality products at an affordable price — and they’re asking ‘what are you going to pay me for shopping with you?’” The merchants themselves have taken notice, he said, as there has been a 14% increase in small businesses offering competitive loyalty programs. Good continues that a point of sale (POS) system like Elavon’s talech is designed to streamline payments while also offering additional capabilities like a loyalty program.

And, he added, with the increase in card transactions comes greater fraud risk. It’s more important than ever to work with partners to ensure that all parties have the tools and solutions in place to battle bad actors.

Entrenched in Operations 

Good said the digital shift represents a prime opportunity for community banks and card issuers to become more firmly entrenched in customers’ operations, offering insight and advice on how to accept payments, improve marketing and reduce costs. But those financial institutions (FIs) need to choose their merchant provider partners wisely.

“A successful merchant program can be a great source of revenue for a community bank or credit union,” said Good. Key considerations revolve around whether merchants will have 24/7/365 support and how new go-to-market strategies can be crafted as small to midsized businesses (SMBs) seek to boost their top lines. Merchant providers should also, ideally, have significant expertise within specific verticals, such as government or healthcare.

“There needs to be true cultural alignment between the FI and the merchant partner, too,” he said, with an emphasis on customer care.

Vertical integration of services and providers creates an ecosystem for the SMB, which can bring flexibility to the point of sale, manage inventory better and improve cash flow simultaneously, as transactions settle with speed instead of previously taking hours or days to clear.

He said that consumers will continue paying through their digital wallets and mobile apps, and with the right providers on board, SMBs, “will not just survive … they’ll thrive.”

To learn more, download How Your Community Bank Can Select a Strong Provider for Merchant Services whitepaper.

This article originally appeared on PYMNTS.com on July 26, 2022.