Small businesses, including retail merchants, are the engine of the U.S. economy. They represent thousands of start-ups and create tens of thousands of new jobs. According to the U.S. Small Business Administration (SBA), as of 2018 there were 30.2 million small businesses in the United States, defined as independent firms that employ fewer than 500 people. These firms created 66% of net new jobs. However, many small businesses are microbusinesses—sole proprietorships with no paid employees. Small businesses face many challenges that result in a high failure rate; just 56% of small firms started in 2014 made it into 2018. Much of this stems from financial hurdles and management issues such as lack of business tools and effective operational systems.

Being able to accept credit and debit card payments is critical for small and micro businesses because cash flow is necessary for their survival. New businesses find the lengthy application process to obtain a merchant banking account to be a major pain point. Even worse, some business owners find their applications declined due to their lack of credit history or poor credit scores. No business can operate today without offering the wide range of payment methods, including mobile wallets, preferred by consumers. The traditional application process for merchant accounts, known as onboarding, by a merchant acquirer or a reseller agent (independent sales organization, an ISO) can take 3–5 days. The emergence of mobile POS (mPOS) providers speeded things up. In 2009, Square caused a sea change in merchant onboarding by streamlining the process from days to minutes. Square became an account aggregator and acts as a merchant of record for its client stores. Clover (owned by First Data, now Fiserv) became the second major mPOS player in 2012. But that’s only part of the story.
In the last few years, both Square and Clover have evolved their offerings beyond the fast onboarding process for payment acceptance.

Both Square and Clover deliver an expansive portfolio of POS terminal devices and software solutions that have given business owners and entrepreneurs a wide spectrum of management tools and value-added business services. By going beyond simply enabling onboarding and payment acceptance, Square and Clover serve as key partners for small businesses. This Mercator Advisory Group research report discusses what this means for merchants and how other payments providers can find new market opportunities and establish long-term client relationships.

The research report, Square and Clover Delivering Merchant Services Beyond Payment Acceptance, identifies success factors that enable merchant acquirers to serve small businesses profitably.