Keala Gaines of eBay: Offering Right Payment Options on Right Devices Remove Friction, Improves Customer Experience

interview keala gaines ebay

The holiday shopping season is in full swing now. And more and more of it is being done online due to the pandemic. Which means more transactions than ever are being done digitally, and over a growing number of devices. And that also means an increasing important piece of the customer experience is how the transaction is executed. The easier and efficient it is for them to buy something, the more likely they are to buy something … and like the overall experience of buying that something.

Recently, I spoke with Keala Gaines, VP of Global Payment Services for eBay, to learn more about the impact modern payment technology is having on the customer experience, how having the payment tech on certain device types can help increase conversion opportunities, and how using the latest technology can also make things run more efficiently.

Interview with Keala Gaines of eBay

Below is an edited transcript of a portion of our conversation. To hear the full conversation click on the embedded SoundCloud player.

Small Business Trends: Sometimes if I don’t see the right offering for the kind of payment I want to make, I walk away. As we see more and more of our shopping transactions taking place online, how much of the customer experience is that payment portion?

Keala Gaines: What’s interesting is certainly we see an emergence of new ways to pay even in an online transaction. As online and mobile also start to converge and those lines blur increasingly now more than ever, as consumers, we expect that pervasive checkout experience. Whether I was looking for it on my phone and put it in my cart and then went online and completed the transaction, right? That it followed me and that those forms of payment were all of a sudden device relevant. So that the way that I shop when I’m on my laptop might be via whatever is stored in my Chrome browser via Google Pay. It may be that I use an Apple device. And then when I’m shopping on mobile, it’s via Apple Pay or credit card. And again, if you’re a buyer anywhere else in the globe, there’s other forms of payment that might be more relevant for you.

In Germany they use secure direct debits quite a bit. In Asia we’re seeing the emergence, of course, of a lot of the wallets, WeChat Pay and things of that nature, right? So I think it’s really about enabling those buyers to shop however they need and the channels and the modalities are changing. And we’re seeing that at the point of sale now too, of course with the pandemic. Folks are adopting NFC (Near-Field Communications) and contactless certainly at higher rates. And we’re seeing that as well, right? All of us in our everyday lives.

Small Business Trends: And as an example for me personally, I buy a lot of stuff from Panera Bread. Sometimes when I’m sitting at home, I’ll just get on a laptop and I’ll buy it. And I notice the payment options are different on the laptop than if I use phone. How important is it to have the right payment for the right device, particularly from a small business perspective, as you try to cut down friction and try to make sure that you finish that transaction.

Keala Gaines: Well, it’s hugely important. Although I will say mobile browsing has gotten leaps and bounds better than we may all remember it in the early, early days, but trying to enter a 16 digit credit card number into a mobile phone, which at the time it was not mobile optimized as we all remember, was not for the faint of heart, and fat fingering as we call it, was quite common. And so I really think it has been with the emergence of mobile that we have seen the proliferation and the increase in popularity of wallets.

Things like PayPal was very early in its mobile applications and having a way to transact quite easily with a login name and a password, which oddly enough is easier than entering 16 digits. And then Apple Pay and Google Pay come along. And so I think the form factor as it evolves is really quite relevant. At the same time, many of us probably wouldn’t make, I don’t know, a $20,000 purchase via a wire transfer on our cell phones. You might, but it’s a little harder. And so I think also how easy and how frictionless a form of payment will enable something to be also determines the form factors that it gains popularity or adoption in.

Small Business Trends: No, and I was also thinking in terms of when I pay for things with the phone, and you have the biometrics because it does the eye scan. Where does the security aspect from these digital payments, how is that something that provides some kind of an advantage or some kind of another way to make sure that, that transaction goes through?

Keala Gaines: Well, I am not probably the best person to give the technical nuances, but at a high level, I will say that they actually can be more secure in some ways, because the information is actually tokenized, and from probably the CRM systems that you work with. The actual card data itself, so the instrument, the credit card, debit card, whatever you used that was inside of that mobile wallet is not actually what is transmitted and stored with the merchant. What is transmitted and stored is a tokenized representation of that card number that the merchant can still settle and get paid against, but your card number isn’t being put out into the ether or stored anywhere for someone to compromise.

Small Business Trends: And I’m guessing also it just makes it so much easier once that transaction takes place, like you were saying with CRM, you can actually … That transaction gets routed into a system and you don’t have to do all this manually any more.

Keala Gaines: That’s right. We definitely see a lot of users want to store their information for repeat purchase, which I myself do quite a bit. It can make the purchasing experience almost too easy…

Small Business Trends: Yeah, like should I have done that? [laughter]

Keala Gaines: Oh wait, did I want to actually hit buy or add to cart? It can be so easy with those stored instruments. It’s great. But that’s also the thing that makes it super easy at the grocery store now to just pull out your phone and click it and not touch anything. So I think it is all about how do we as merchants adopt the technology that is relevant to the device, the use case, and making sure that we’re giving consumers those options so that if they want to use them, they can.

Small Business Trends: And then they have this whole thing that has accelerated due to the pandemic with cashless. Nobody wants to take the cash. I don’t have a lot of cash on me because I don’t want to be giving it out to people. What about this technology that allows you to just walk in the store and you pick up something and you keep it and then you walk out of the store and it totally has all your stuff added up and charge your account.

Keala Gaines: There’s obviously way more systems at play there than just payments. However, the inventory is tagged and the devices at the door and the cameras and all that stuff, it really is mind boggling. But just as in e-commerce as a whole, enabling the financial part of that transaction at the right time, in the right modality, which is triggering it as you walk out the door, I would assume and not before.

Small Business Trends: Right.

Keala Gaines: And this notion that you may have an instrument on file that is stored to your profile that enables that really frictionless experience to happen. So I think about payments as being a huge enabler for new and emerging technologies. And while we haven’t seen that one as pervasive yet, I think we’ve seen hints that it’s coming and I won’t be surprised when we see more of it.

This article, "Keala Gaines of eBay: Offering Right Payment Options on Right Devices Remove Friction, Improves Customer Experience" was first published on Small Business Trends



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Keala Gaines of eBay: Offering Right Payment Options on Right Devices Remove Friction, Improves Customer Experience

interview keala gaines ebay

The holiday shopping season is in full swing now. And more and more of it is being done online due to the pandemic. Which means more transactions than ever are being done digitally, and over a growing number of devices. And that also means an increasing important piece of the customer experience is how the transaction is executed. The easier and efficient it is for them to buy something, the more likely they are to buy something … and like the overall experience of buying that something.

Recently, I spoke with Keala Gaines, VP of Global Payment Services for eBay, to learn more about the impact modern payment technology is having on the customer experience, how having the payment tech on certain device types can help increase conversion opportunities, and how using the latest technology can also make things run more efficiently.

Interview with Keala Gaines of eBay

Below is an edited transcript of a portion of our conversation. To hear the full conversation click on the embedded SoundCloud player.

Small Business Trends: Sometimes if I don’t see the right offering for the kind of payment I want to make, I walk away. As we see more and more of our shopping transactions taking place online, how much of the customer experience is that payment portion?

Keala Gaines: What’s interesting is certainly we see an emergence of new ways to pay even in an online transaction. As online and mobile also start to converge and those lines blur increasingly now more than ever, as consumers, we expect that pervasive checkout experience. Whether I was looking for it on my phone and put it in my cart and then went online and completed the transaction, right? That it followed me and that those forms of payment were all of a sudden device relevant. So that the way that I shop when I’m on my laptop might be via whatever is stored in my Chrome browser via Google Pay. It may be that I use an Apple device. And then when I’m shopping on mobile, it’s via Apple Pay or credit card. And again, if you’re a buyer anywhere else in the globe, there’s other forms of payment that might be more relevant for you.

In Germany they use secure direct debits quite a bit. In Asia we’re seeing the emergence, of course, of a lot of the wallets, WeChat Pay and things of that nature, right? So I think it’s really about enabling those buyers to shop however they need and the channels and the modalities are changing. And we’re seeing that at the point of sale now too, of course with the pandemic. Folks are adopting NFC (Near-Field Communications) and contactless certainly at higher rates. And we’re seeing that as well, right? All of us in our everyday lives.

Small Business Trends: And as an example for me personally, I buy a lot of stuff from Panera Bread. Sometimes when I’m sitting at home, I’ll just get on a laptop and I’ll buy it. And I notice the payment options are different on the laptop than if I use phone. How important is it to have the right payment for the right device, particularly from a small business perspective, as you try to cut down friction and try to make sure that you finish that transaction.

Keala Gaines: Well, it’s hugely important. Although I will say mobile browsing has gotten leaps and bounds better than we may all remember it in the early, early days, but trying to enter a 16 digit credit card number into a mobile phone, which at the time it was not mobile optimized as we all remember, was not for the faint of heart, and fat fingering as we call it, was quite common. And so I really think it has been with the emergence of mobile that we have seen the proliferation and the increase in popularity of wallets.

Things like PayPal was very early in its mobile applications and having a way to transact quite easily with a login name and a password, which oddly enough is easier than entering 16 digits. And then Apple Pay and Google Pay come along. And so I think the form factor as it evolves is really quite relevant. At the same time, many of us probably wouldn’t make, I don’t know, a $20,000 purchase via a wire transfer on our cell phones. You might, but it’s a little harder. And so I think also how easy and how frictionless a form of payment will enable something to be also determines the form factors that it gains popularity or adoption in.

Small Business Trends: No, and I was also thinking in terms of when I pay for things with the phone, and you have the biometrics because it does the eye scan. Where does the security aspect from these digital payments, how is that something that provides some kind of an advantage or some kind of another way to make sure that, that transaction goes through?

Keala Gaines: Well, I am not probably the best person to give the technical nuances, but at a high level, I will say that they actually can be more secure in some ways, because the information is actually tokenized, and from probably the CRM systems that you work with. The actual card data itself, so the instrument, the credit card, debit card, whatever you used that was inside of that mobile wallet is not actually what is transmitted and stored with the merchant. What is transmitted and stored is a tokenized representation of that card number that the merchant can still settle and get paid against, but your card number isn’t being put out into the ether or stored anywhere for someone to compromise.

Small Business Trends: And I’m guessing also it just makes it so much easier once that transaction takes place, like you were saying with CRM, you can actually … That transaction gets routed into a system and you don’t have to do all this manually any more.

Keala Gaines: That’s right. We definitely see a lot of users want to store their information for repeat purchase, which I myself do quite a bit. It can make the purchasing experience almost too easy…

Small Business Trends: Yeah, like should I have done that? [laughter]

Keala Gaines: Oh wait, did I want to actually hit buy or add to cart? It can be so easy with those stored instruments. It’s great. But that’s also the thing that makes it super easy at the grocery store now to just pull out your phone and click it and not touch anything. So I think it is all about how do we as merchants adopt the technology that is relevant to the device, the use case, and making sure that we’re giving consumers those options so that if they want to use them, they can.

Small Business Trends: And then they have this whole thing that has accelerated due to the pandemic with cashless. Nobody wants to take the cash. I don’t have a lot of cash on me because I don’t want to be giving it out to people. What about this technology that allows you to just walk in the store and you pick up something and you keep it and then you walk out of the store and it totally has all your stuff added up and charge your account.

Keala Gaines: There’s obviously way more systems at play there than just payments. However, the inventory is tagged and the devices at the door and the cameras and all that stuff, it really is mind boggling. But just as in e-commerce as a whole, enabling the financial part of that transaction at the right time, in the right modality, which is triggering it as you walk out the door, I would assume and not before.

Small Business Trends: Right.

Keala Gaines: And this notion that you may have an instrument on file that is stored to your profile that enables that really frictionless experience to happen. So I think about payments as being a huge enabler for new and emerging technologies. And while we haven’t seen that one as pervasive yet, I think we’ve seen hints that it’s coming and I won’t be surprised when we see more of it.

This article, "Keala Gaines of eBay: Offering Right Payment Options on Right Devices Remove Friction, Improves Customer Experience" was first published on Small Business Trends



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In the News: Small Business Owners Frustrated Not Getting Aid

Business Owners Frustrated

No matter what metric you look at, business is more likely down than it was a year ago. And in some cases, it is dangerously down as many small businesses struggle to stay open in the midst of a pandemic. This has increased the frustration owners are feeling with the lack of local and state aid. So much so, 86% of small business owners say they have not received state or local aid, despite such aid being available to them.

Even if the aid is available, some business owners are reluctant. Close to a quarter or 23% say the terms of the help was unclear, while another 21% say they are not interested in amassing more debt. Moreover, 13% are citing a “distrust of government-backed financial programs.”

This however doesn’t mean small business owners are not getting the help they need. According to Fundera, which conducted the survey, of the businesses which accepted aid, more than half received a grant. And almost a third accepted a loan, while another 8% benefited from rent relief and over 5% from tax relief.

You can read the rest of, “Lack of State and Local Aid Frustrates Small Business Owners Nationwide” in this week’s roundup along with the small business-related stories.

Small Business News Roundup for Nov. 27, 2020

Here are the stories for small business owners this week:

How to Classify Employees and Independent Contactors Right Every Time

If there is one thing that consistently gets small business owners in trouble with state authorities it’s their classification of whether an individual is an employee or independent contractor. They reason that someone who works with them part-time or not at their location can be classified as an independent contractor.

Black Friday and Cyber Monday Deals for Small Business Owners

Black Friday shopping is likely to look a bit different this year. But there are still plenty of deals to be had. And many of them may appeal to business shoppers. Whether you’re looking for new computers, furniture, or clothing, many retailers are offering their best deals of the year. You can pick up items in stores in many cases or shop online.

Clapper Video Platform Enables Monetization for Creators

Clapper, a digital media company that delivers short videos via a mobile app similar to TikTok, recently announced the launch of Clapper FAM, a new monetization feature that allows content creators to develop an income stream through donations from supporters inside the app.

Keap names the IKON Small Business of the Year Winner

Mwale and Chantel Henry, The Legacy Project/The Bestseller Academy, are the winners of Keap’s $15,000 IKON Small Business of the Year award. The winner was chosen from four finalists. Keap holds the contest annually, and the winner is chosen by Keap user votes. The four finalists gave presentations about their businesses and how they used Keap to grow during 2020.

SBA Veterans Small Business Advisory Committees Hosting Virtual Public Meetings in December

The U.S. Small Business Administration’s (SBA) Interagency Task Force on Veterans Small Business Development (IATF) and Advisory Committee on Veterans Business Affairs (ACVBA) have announced that they will be holding a series of virtual public meetings on December 2 and December 3.

eBay and Optoro Partner for Resellers

eBay has formed an exclusive ‘recommerce’ partnership with Optoro. Optoro provides innovative tech solutions to help retailers process, manage and sell returns and excess inventory more proficiently. The alliance will mean eBay sellers are provided with an influx of high-demand wholesale inventory, which they can sell quickly and efficiently.

Demandforce Online Booking Allows for 24-7 Appointment Scheduling

Service-based businesses rely greatly on managing their appointments effectively. Demandforce Online Booking looks to make the process more efficient and less labor-intensive. The new functionalities will make it easier for clients to schedule an appointment online. This is especially important because 36% of clients avoid businesses with complex appointment scheduling systems.

Ooma Meetings Adds to Choices for a Collaboration and Conferencing Platform

As more people work remotely, the addition of video meetings to Ooma Office Pro is a natural step. Even though the pandemic is a big driver, the trend was going this way long before. Add the pandemic and 57% of small business owners believe remote work will continue long after stay-at-home orders are lifted.

Image: Depositphotos.com

This article, "In the News: Small Business Owners Frustrated Not Getting Aid" was first published on Small Business Trends



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In the News: Small Business Owners Frustrated Not Getting Aid

Business Owners Frustrated

No matter what metric you look at, business is more likely down than it was a year ago. And in some cases, it is dangerously down as many small businesses struggle to stay open in the midst of a pandemic. This has increased the frustration owners are feeling with the lack of local and state aid. So much so, 86% of small business owners say they have not received state or local aid, despite such aid being available to them.

Even if the aid is available, some business owners are reluctant. Close to a quarter or 23% say the terms of the help was unclear, while another 21% say they are not interested in amassing more debt. Moreover, 13% are citing a “distrust of government-backed financial programs.”

This however doesn’t mean small business owners are not getting the help they need. According to Fundera, which conducted the survey, of the businesses which accepted aid, more than half received a grant. And almost a third accepted a loan, while another 8% benefited from rent relief and over 5% from tax relief.

You can read the rest of, “Lack of State and Local Aid Frustrates Small Business Owners Nationwide” in this week’s roundup along with the small business-related stories.

Small Business News Roundup for Nov. 27, 2020

Here are the stories for small business owners this week:

How to Classify Employees and Independent Contactors Right Every Time

If there is one thing that consistently gets small business owners in trouble with state authorities it’s their classification of whether an individual is an employee or independent contractor. They reason that someone who works with them part-time or not at their location can be classified as an independent contractor.

Black Friday and Cyber Monday Deals for Small Business Owners

Black Friday shopping is likely to look a bit different this year. But there are still plenty of deals to be had. And many of them may appeal to business shoppers. Whether you’re looking for new computers, furniture, or clothing, many retailers are offering their best deals of the year. You can pick up items in stores in many cases or shop online.

Clapper Video Platform Enables Monetization for Creators

Clapper, a digital media company that delivers short videos via a mobile app similar to TikTok, recently announced the launch of Clapper FAM, a new monetization feature that allows content creators to develop an income stream through donations from supporters inside the app.

Keap names the IKON Small Business of the Year Winner

Mwale and Chantel Henry, The Legacy Project/The Bestseller Academy, are the winners of Keap’s $15,000 IKON Small Business of the Year award. The winner was chosen from four finalists. Keap holds the contest annually, and the winner is chosen by Keap user votes. The four finalists gave presentations about their businesses and how they used Keap to grow during 2020.

SBA Veterans Small Business Advisory Committees Hosting Virtual Public Meetings in December

The U.S. Small Business Administration’s (SBA) Interagency Task Force on Veterans Small Business Development (IATF) and Advisory Committee on Veterans Business Affairs (ACVBA) have announced that they will be holding a series of virtual public meetings on December 2 and December 3.

eBay and Optoro Partner for Resellers

eBay has formed an exclusive ‘recommerce’ partnership with Optoro. Optoro provides innovative tech solutions to help retailers process, manage and sell returns and excess inventory more proficiently. The alliance will mean eBay sellers are provided with an influx of high-demand wholesale inventory, which they can sell quickly and efficiently.

Demandforce Online Booking Allows for 24-7 Appointment Scheduling

Service-based businesses rely greatly on managing their appointments effectively. Demandforce Online Booking looks to make the process more efficient and less labor-intensive. The new functionalities will make it easier for clients to schedule an appointment online. This is especially important because 36% of clients avoid businesses with complex appointment scheduling systems.

Ooma Meetings Adds to Choices for a Collaboration and Conferencing Platform

As more people work remotely, the addition of video meetings to Ooma Office Pro is a natural step. Even though the pandemic is a big driver, the trend was going this way long before. Add the pandemic and 57% of small business owners believe remote work will continue long after stay-at-home orders are lifted.

Image: Depositphotos.com

This article, "In the News: Small Business Owners Frustrated Not Getting Aid" was first published on Small Business Trends



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Adobe Predicts Online Spending to Increase 33% in 2020 Over 2019

Online Spending

The first set of holiday data and analytics from Adobe reveals online spending is set to increase by 33% in 2020 over 2019. In great part, the global pandemic is responsible for more consumers shopping online and businesses increasing their online presence.

The Adobe Analytics data also reveals consumers spent $58.9 billion online from 11/1—11/23. According to the data, this is an unprecedented 32% Year on Year (YoY) growth as people stay home and cut back on in-store shopping.

Adobe Predicts 33% Increase in Online Spending

The growth also takes into account the slowdown in online shopping during Election Day. Despite the election, shoppers made up the gap with the last 3 days growing at 49% YoY. The result is a dramatic shift in how consumers are shopping.

The Shift in Shopping

Another data point from the report is an increase of 560% in the last 7 days for online grocery orders for Thanksgiving. This is over daily avg in October. The growth is incredible compared to last year when it was only 10%.

Adobe is pointing out Cyber Week is now Cyber Month as more retailers offer discounts all month long. On Sunday 11/22, discounts started in earnest for a range of consumer electronics. This includes discounts for computers with savings of 27.8%, appliances (17.3%), toys (17%), and electronics categories (23.6%). The discounts are much deeper this year unlike in 2019 when on the weekend before Thanksgiving, computers were discounted by 15% and toys at 7%.

When it comes to travel, consumers are more optimistic as Pfizer and Moderna have COVID-19 vaccines in the pipeline. Bookings for 2021 travel is seeing a 35% YoY growth. This is compared to the 11% growth in the 9-day period before 11/9.

More Findings

Adobe Analytics also reveals:

  • Shipping: There is a 67% YoY fast shipping growth, and for standard shipping, it is up 61% YoY. Curbside and in-store pickup is also up by 115% YoY.
  • Large and Small Retailers: In the early Cyber Week start large retailers saw over 136% boost in revenue. This is over the last 3 days vs the October baseline. For SMB retailers the growth is a significant 117% boost over the same period.
  • A Look Ahead: Adobe is forecasting the full season from November to December is going to be $189 billion. This is online spending representing 33% growth YoY. Adobe says Thanksgiving will hit $6 billion (42.3% growth YoY), Black Friday $10.3 billion (39.2%) and Cyber Monday $12.7 billion (35.3%).

The survey was carried out with the participation of over 1,000 U.S. consumers. Additionally, Adobe Analytics analyzed one trillion visits to U.S. retail sites, 100 million SKUs and 80 of the 100 largest retailers in the U.S.

Image: Depositphotos.com

This article, "Adobe Predicts Online Spending to Increase 33% in 2020 Over 2019" was first published on Small Business Trends



via Small Business Trends Business Feeds

Adobe Predicts Online Spending to Increase 33% in 2020 Over 2019

Online Spending

The first set of holiday data and analytics from Adobe reveals online spending is set to increase by 33% in 2020 over 2019. In great part, the global pandemic is responsible for more consumers shopping online and businesses increasing their online presence.

The Adobe Analytics data also reveals consumers spent $58.9 billion online from 11/1—11/23. According to the data, this is an unprecedented 32% Year on Year (YoY) growth as people stay home and cut back on in-store shopping.

Adobe Predicts 33% Increase in Online Spending

The growth also takes into account the slowdown in online shopping during Election Day. Despite the election, shoppers made up the gap with the last 3 days growing at 49% YoY. The result is a dramatic shift in how consumers are shopping.

The Shift in Shopping

Another data point from the report is an increase of 560% in the last 7 days for online grocery orders for Thanksgiving. This is over daily avg in October. The growth is incredible compared to last year when it was only 10%.

Adobe is pointing out Cyber Week is now Cyber Month as more retailers offer discounts all month long. On Sunday 11/22, discounts started in earnest for a range of consumer electronics. This includes discounts for computers with savings of 27.8%, appliances (17.3%), toys (17%), and electronics categories (23.6%). The discounts are much deeper this year unlike in 2019 when on the weekend before Thanksgiving, computers were discounted by 15% and toys at 7%.

When it comes to travel, consumers are more optimistic as Pfizer and Moderna have COVID-19 vaccines in the pipeline. Bookings for 2021 travel is seeing a 35% YoY growth. This is compared to the 11% growth in the 9-day period before 11/9.

More Findings

Adobe Analytics also reveals:

  • Shipping: There is a 67% YoY fast shipping growth, and for standard shipping, it is up 61% YoY. Curbside and in-store pickup is also up by 115% YoY.
  • Large and Small Retailers: In the early Cyber Week start large retailers saw over 136% boost in revenue. This is over the last 3 days vs the October baseline. For SMB retailers the growth is a significant 117% boost over the same period.
  • A Look Ahead: Adobe is forecasting the full season from November to December is going to be $189 billion. This is online spending representing 33% growth YoY. Adobe says Thanksgiving will hit $6 billion (42.3% growth YoY), Black Friday $10.3 billion (39.2%) and Cyber Monday $12.7 billion (35.3%).

The survey was carried out with the participation of over 1,000 U.S. consumers. Additionally, Adobe Analytics analyzed one trillion visits to U.S. retail sites, 100 million SKUs and 80 of the 100 largest retailers in the U.S.

Image: Depositphotos.com

This article, "Adobe Predicts Online Spending to Increase 33% in 2020 Over 2019" was first published on Small Business Trends



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You’ll Tune It Out, They Said (CARTOON)

This article, "You’ll Tune It Out, They Said (CARTOON)" was first published on Small Business Trends



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You’ll Tune It Out, They Said (CARTOON)

This article, "You’ll Tune It Out, They Said (CARTOON)" was first published on Small Business Trends



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5 Tips to Get Ready for Filing W-2 and More

Filing W-2

Businesses not only have to file their income tax returns, but also various information returns. The failure to file these other returns can result in costly penalties. Here are some forms you’ll need to file in 2021 to report payments in 2020.

W-2 Filing Tips for 2020

Start preparing now so you can timely submit them. Here are some tips to help you.

1. Prepare now to complete and file required forms

Gather the information you’ll need to prepare required forms. This means reviewing payroll records for each employee, including those who are no longer on your payroll, as well as other records for any independent contractors engaged during 2020.

Decide who is going to prepare returns for you. Will you do it in house? Use a CPA or payroll service provider? If you DIY, obtain the required forms from the IRS (it can take a week, two weeks, or more to receive) or an office supply store, or check your business tax preparation software for its capability. You can’t simply download them from the IRS website.

Determine how you’ll submit forms to workers and to the government. For employees, you can provide them in person, by mail, or electronically if you obtain their prior consent for electronic delivery (e.g., email or access to an online portal). For the government, you can file on paper if you aren’t required to file electronically, but you can choose to file electronically.

Mark your calendar as described below so you don’t miss any deadlines.

2. File W-2s for employees

If you have any employees, you must provide them with Form W-2 reporting wages and certain benefits they received in 2020. The due date for 2020 W-2s is February 1, 2021 (January 31, the usual deadline, is a Sunday). Be sure to include any paid sick leave and paid family leave benefits for employees impacted by COVID-19.

If you opted to defer the employees’ share of Social Security taxes (part of FICA) on wages from September 1, 2020, through December 31, 2020, you’ll also have to file Form W-2c to report the catchup withholding from January 1, 2021, through April 30, 2021.

Be sure to timely transmit copies of W-2s, along with Form W-3, to the Social Security Administration (not the IRS). This can be done electronically. If your CPA or payroll company doesn’t do this for you, register to use Business Services Online.

3. Report payments to independent contractors

If you paid any independent contractor $600 or more in 2020, you must provide the worker Form 1099-NEC. This is a new form for 2020 payments; previously such payments were reported in box 7 of Form 1099-MISC.

The deadline for Form 1099-NEC is the same for W-2s. A copy of the form must be transmitted to the IRS by the same date used for W-2s.

4. Report distributions from qualified retirement plans

Did any employee receive a distribution from the company’s qualified retirement plan? Perhaps a qualified coronavirus distribution up to $100,000? All distributions, qualified or not, must be reported to employees on Form 1099-R.

There’s a new section for reporting distributions in 2020 up to $5,000 for qualified birth or adoption expenses. There’s also a new code (“BA”) for reporting a repayment of such distributions.

The 2020 Form 1099-R must be provided to the recipient by February 1, 2021. Transmittal of copies to the IRS are due by March 1, 2021, if filed on paper, or by March 31, 2021, if filing electronically.

5. Report company-provided medical coverage

If you are an applicable large employer (ALE) subject to the Affordable Care Act’s employer mandate, you must provide employees with Form 1095-C to inform them of health coverage particulars. Similarly, if you are not an ALE but have a self-insured medical plan providing minimum essential health coverage, such as an individual coverage health reimbursement plan (ICHRA), you must give covered employees Form 1095-B.

The deadline for providing employees with their forms is March 2, 2021. However, different dates apply for submitting copies to the IRS, along with transmittal forms 1094-C or 1094-B: March 1, 2021, if filing on paper, or March 31, 2021, if filing electronically.

Conclusion

The sooner you begin preparations for meeting information return responsibilities, the easier it will be to meet the deadlines and avoid penalties.

Image: Depositphotos.com

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5 Tips to Get Ready for Filing W-2 and More

Filing W-2

Businesses not only have to file their income tax returns, but also various information returns. The failure to file these other returns can result in costly penalties. Here are some forms you’ll need to file in 2021 to report payments in 2020.

W-2 Filing Tips for 2020

Start preparing now so you can timely submit them. Here are some tips to help you.

1. Prepare now to complete and file required forms

Gather the information you’ll need to prepare required forms. This means reviewing payroll records for each employee, including those who are no longer on your payroll, as well as other records for any independent contractors engaged during 2020.

Decide who is going to prepare returns for you. Will you do it in house? Use a CPA or payroll service provider? If you DIY, obtain the required forms from the IRS (it can take a week, two weeks, or more to receive) or an office supply store, or check your business tax preparation software for its capability. You can’t simply download them from the IRS website.

Determine how you’ll submit forms to workers and to the government. For employees, you can provide them in person, by mail, or electronically if you obtain their prior consent for electronic delivery (e.g., email or access to an online portal). For the government, you can file on paper if you aren’t required to file electronically, but you can choose to file electronically.

Mark your calendar as described below so you don’t miss any deadlines.

2. File W-2s for employees

If you have any employees, you must provide them with Form W-2 reporting wages and certain benefits they received in 2020. The due date for 2020 W-2s is February 1, 2021 (January 31, the usual deadline, is a Sunday). Be sure to include any paid sick leave and paid family leave benefits for employees impacted by COVID-19.

If you opted to defer the employees’ share of Social Security taxes (part of FICA) on wages from September 1, 2020, through December 31, 2020, you’ll also have to file Form W-2c to report the catchup withholding from January 1, 2021, through April 30, 2021.

Be sure to timely transmit copies of W-2s, along with Form W-3, to the Social Security Administration (not the IRS). This can be done electronically. If your CPA or payroll company doesn’t do this for you, register to use Business Services Online.

3. Report payments to independent contractors

If you paid any independent contractor $600 or more in 2020, you must provide the worker Form 1099-NEC. This is a new form for 2020 payments; previously such payments were reported in box 7 of Form 1099-MISC.

The deadline for Form 1099-NEC is the same for W-2s. A copy of the form must be transmitted to the IRS by the same date used for W-2s.

4. Report distributions from qualified retirement plans

Did any employee receive a distribution from the company’s qualified retirement plan? Perhaps a qualified coronavirus distribution up to $100,000? All distributions, qualified or not, must be reported to employees on Form 1099-R.

There’s a new section for reporting distributions in 2020 up to $5,000 for qualified birth or adoption expenses. There’s also a new code (“BA”) for reporting a repayment of such distributions.

The 2020 Form 1099-R must be provided to the recipient by February 1, 2021. Transmittal of copies to the IRS are due by March 1, 2021, if filed on paper, or by March 31, 2021, if filing electronically.

5. Report company-provided medical coverage

If you are an applicable large employer (ALE) subject to the Affordable Care Act’s employer mandate, you must provide employees with Form 1095-C to inform them of health coverage particulars. Similarly, if you are not an ALE but have a self-insured medical plan providing minimum essential health coverage, such as an individual coverage health reimbursement plan (ICHRA), you must give covered employees Form 1095-B.

The deadline for providing employees with their forms is March 2, 2021. However, different dates apply for submitting copies to the IRS, along with transmittal forms 1094-C or 1094-B: March 1, 2021, if filing on paper, or March 31, 2021, if filing electronically.

Conclusion

The sooner you begin preparations for meeting information return responsibilities, the easier it will be to meet the deadlines and avoid penalties.

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This article, "5 Tips to Get Ready for Filing W-2 and More" was first published on Small Business Trends



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