So we are nearing the end of the first half of 2020. A safe statement is that none of us have ever experienced a half year anything like this one. A roaring economy in January and early February was ground to a halt by a pernicious virus.
The following confidence index from the National Federation of Independent Business shows a precipitous dip in April and then a modest rebound in May. We’re hopeful that June’s index will improve again but given COVID’s recent surge, it may not.
Couple the NFIB index with the data in the chart below, which suggests that small businesses may be in for another dip, and you get the point. Anyone suggesting “we’re out of the woods” isn’t living in reality.
Visa, like Mastercard, is a huge player in terms of its connections to local and small businesses. And, according to the piece in PYMTS, Visa is working hard to solve some of the challenges facing small businesses.
Suzan Kereere, Visa’s head of merchant sales and acquisition, has been in the merchant card space her whole career. She makes a forceful point that there really is no economic recovery without a small business recovery. After all, SMBs drive 46% of U.S. GDP and account for 98% of all businesses.
Building an SMB Marketplace
There are a couple of important elements of Visa’s initiative. The first is something called the Visa Small Business Hub. This hub could as easily be called a marketplace, given the laundry list of participants, many of which we’re quite familiar with at Localogy. For example, PayPal, Wix.com, WordPress.com, Deluxe, FreshBooks, Shopify, Womply, and Yelp.
It is unclear how much integration there is among the hub participants. We also do not know how much of the hub will be self-service. Ultimately we can’t tell how much of this is sizzle vs. steak. We’ll examine it more closely and report back.
Taking it to the Street
The far more intriguing initiative from our point of view is Visa’s “street teams” effort. Visa is apparently putting its people on the ground to help small businesses solve many of today’s challenges.
According to the release, Visa’s “street teams” of advisers will help SMBs reopen their businesses and install solutions like contactless payments.
According to Kereere, “As a B2B platform, we rarely have a direct interaction with many small businesses. So, the street teams give us the ability not only to show up in their greatest time of need, but also perhaps to build relationships with them and understand their needs better. One 10-minute conversation might inform, [but] 100 10-minute conversations means you can spot a pattern, [and] 1,000 10-minute conversations gives us a lot of solid information.”
So What Took You So Long?
One initial reaction is that the statement that “we rarely have a direct interaction” is puzzling. You would think a company like Visa, with 50 million small business customers, would already have structured interactions with a sample of its customers.
Hopefully, these street teams will learn more about the complexities and challenges facing small businesses. Most of these issues, from competing for talent to struggling with technology, have been around for a long time. And they are independent of the coronavirus.
Maybe Visa will recognize that assembling a bunch of companies into a marketplace actually creates a burden for the small business owner to make all the components work collaboratively.
Here is what we would find really interesting. What if companies like Visa or Thryv sent real advisors into small businesses to help them modernize their operations? Now that would be something to applaud.