Digital transformation is changing the face of business.
That's the process of replacing older analog systems with modern technological systems.
Now what this means for you and me as consumers, is that the way we spend our money especially during this COVID holiday shopping.
Season is changing.
All right, so now
I'm Dan Patterson for CNET and here to help us make sense of everything is veces Michelle Heron.
So Michelle, Thanks a ton for joining us.
Let's Start with SMBs right?
If you work in tech or you work in business, you kind of translate some of this jargon and it makes sense for everyone else.
watching this who is a consumer.
What is an SMB Can you give me an example of a company like this that I might be aware of or shop at locally?
Well, SMBs are everywhere and the profile is really changing.
So SMBs are your typical brick and mortars.
So anything that's not a chain when you're going down your local Main Street and you're shopping at your favorite retailer, maybe it's a boutique.
Personally, I've got my favorite bike store.
We love to bike around town, and so on.
Those are independent owners.
Many of the restaurants that you go to as well, they will be independent owners, chefs, they might be small chains but they really operates to like a small business.
So they're really all around us.
And I think what's an interesting shift is we're seeing many entities go online first as well.
So it's not just that brick and mortar Main Street vibe anymore.
So how was before the pandemic, how is digital transformation changing these SMBs?
Well, it was already happening.
So this has been a shift in the past nine months have been transformative But at visa, we've been thinking about digital for the last decade.
So we've been in the business, we have a platform called authorized net.
We enable small businesses to get online, transact and protect their businesses.
And we've been doing that for over 20 years.
So that's been happening, but I will say that the big aha moment that we Had in the past eight to nine months is that the pandemic has accelerated the digital shift especially for SMBs by about five to six years.
So we were on a journey it was happening but.
The momentum now that we've seen due to that due to COVID is absolutely phenomenal and it's here to stay.
So give me some examples of what you learned from this research question.
According to your study, you talked to over 2000 businesses you pulled 4500 consumers in eight different global markets.
So that's a lot.
Tell us what you learned after the pandemic.
What is changing?
Well, I think a few of the things that we've found is that SMEs and.
And consumers are overall very optimistic about commerce in general and especially this holiday season.
So we're seeing, obviously unprecedented times, but people have that desire for normalcy.
So when we talk to consumers, what they're telling us is that they do plan to shop for the holiday season.
They do plan to gift give But what they are telling us is that 52% of their purchases will either be totally online or at least, you know, somewhat online going back and forth to like physical brick and mortar, and then online so consumers are really demanding to shift digital.
We've seen that happening, but I think we're going to see See a big uptick this year.
And SM bees are also extremely positive as well.
They still think that the holiday season is going to be a big burst for them.
They're ramping up, they're preparing and they expect it to be a positive season.
So, what are happening with some trends that we've heard about recently, for example, window shopping where I might Physically go to a store but then and end up buying something online.
With the pandemic I can't physically go to a store but I definitely want to [UNKNOWN] try on or try out products before I buy them.
Well, I think the digital in the ecommerce world is getting friendlier and friendlier.
So I know even personally, for example I bought my glasses Warby Parker, you know, big fan.
And I bought them online they come they you know, they don't fit right.
And so the way that they have really made that experience, really seamless for the user to come in, it's a very safe environment do those adjustments.
It really allows the consumer to transition from that online to the physical exam.
Experience very easily.
The other thing that I will say is that we are seeing a little less channel switching and for like, you know everybody out there, that's watching.
A year ago we were seeing exactly that trend.
Go on, go check everything out online, then go in the store and make your purchase or vice versa.
Now because people don't have the option to get out of their houses much, worse.
Seeing that when people go to the stores, they're actually quite purposeful.
So they might have done some some research ahead, but when they go they generally kind of will check everything out and buy in store or if they're committed to that online channel.
They're gonna stay in the online channel.
So all the more reason for all entities retailers, restaurants, you know, whoever you're selling and whatever you're selling, to be prepared to capture that customer wherever they want to shop.
What about scams fraud and different types of hacks?
We know that as digital shopping goes up, so does digital insecurity.
You got it and we've been, you know, managing fraud for merchants and retailers for a long time.
But what we're seeing is a lot of these people that haven't been native to digital that are trying it out for the first time.
They're getting breached.
And it used to be that the criminals would go after the big enterprise sites, lots of opportunity, lots of volume, but they're going after small business sites or startup sites as well.
And there's a couple of different types of fraud schemes that we're seeing, When we call card testing, and that is, you know, some payments jargon, but what that really means is that criminals are going out to the dark web.
They're buying, you know, reams of credit card numbers.
And what they have to do is they have to figure out if they're good.
So now I'm a criminal.
I've got, you know, 10 million card numbers and I got to know like, Where am I going to focus my time which of these are the bad ones?
So what I do is I find an unwitting E- commerce site, and then I just pummeled that site with transactions trying to find the good cards which ones are active have balances live.
And so while that is not taking money out of the wallet from the login, A settlement perspective for the merchant.
What is happening is that if they've got different services turned on, they're getting hit with a lot of fees.
And we've also seen situations where it's actually from a volume perspective taken down their site.
So businesses really have to protect themselves with the tools to ensure that scenarios like that don't happen.
Michelle Heron, Senior Vice President At VISA.
Let's leave us with some advice as I'm shopping this fall, tell me how I can stay secure but also leverage some of the most interesting or innovated digital transaction tools that are now at my disposal.
Well, so I think, you know, kind of taking your question from the consumer perspective first, you know, the first thing that we would recommend a visa is to make sure that you have a contact list.
Purchasing modality and so I might mean by that, make sure that you've got that contactless chip on your Visa card so that you can tap to pay.
We want all of those physical experiences to be really touchless.
It also might mean that like you install Apple Pay on your phone and you look for places to do that.
And I know just personally going out, many of the retailers and the small businesses that I frequent are ensuring that they have contactless enabled.
I'm seeing applique signs everywhere.
So I think that's one way to keep yourself really safe.
The other thing I think you can do is really research and support Your small businesses.
So we have seen a bit of a trend where shoppers are going for what's easy, right?
So like there's this inertia issue.
And so if I'm hungry, I know that.
That fast foods available.
And so we're seeing some of those fast food big chains do really really well right now.
But what we really want to do is also support our small business restaurants.
So I would say what we can also do to stay safe Support our local communities is get online.
So many businesses have been so resilient and figuring out delivery and, you know, even like fine dining now they're doing carry out options.
So just do a little research and find out where you can have that safe commerce experience and support the community.
All right, that's visas.
Michelle Herron to learn more about how digital transformation is changing almost every business you can follow cnet's now what.