SEPACorporate StrategySMEs ‘will switch banks to gain real-time payments’

SMEs ‘will switch banks to gain real-time payments’

A global survey reveals high demand among US and European small and medium-sized businesses for fast and innovative payment and banking services.

The majority of small and medium-sized (SMEs) business owners in the US and Europe would consider switching account providers for the offer of real-time payments, according to an online poll by YouGov conducted on behalf of ACI Worldwide.

The electronic payments specialist reports that 65% of US SME businesses stated that if banks offered real-time payments capabilities, it would ‘encourage’ them to switch providers. Nine in 10 respondents in Italy, 75% in France and 58% in Germany also said the offer of faster electronic payments would be a reason for them to switch banks.

The research “shows that businesses increasingly recognise the value of fast, efficient and predictable payments to the overall success of their business.”

Among the survey’s key findings:

Banking in real-time is a priority for many SMEs: Of the US respondents that find faster payments appealing, 74% said that they would find receiving payments from customers in real-time important, with 54% saying the same about paying vendors and suppliers in real-time. Fifty-six percent of German SME businesses surveyed and 50% of those in Italy said real-time banking services would be ‘essential’ to the success of their business.

SMEs want new and innovative banking services: Many SMEs have switched to new payment methods and providers in recent years, a move which they say has been beneficial for their business. For example, 67% of SMEs in Germany use mobile or internet banking (39% in the US), and 45% (32% in the US) use person-to-person (P2P) payment providers such as PayPal or Venmo.

Payment delays are amongst the top frustrations of SMEs: Delays in payments either reaching their own account or the accounts of vendors and suppliers are among the most cited frustrations of businesses surveyed in the US and Europe (51% in the US, 61% in France, 65% in Italy and 56% in Germany).

“2017 will be a crucial year for real-time payments globally,” said Barry Kislingbury, director solution consulting, immediate payments, ACI Worldwide. “

“Banks have a real opportunity to work with their customers and offer the new and innovative services they really want. Delayed and unpredictable cash flow can significantly affect the success of businesses, particularly small ones.

“The real-time schemes currently being built in the US and Europe will empower consumers and businesses to send and receive real-time payments from their existing accounts, and will also provide a platform for banks to launch new services built around a real-time payments hub for today’s digital economy.”

According to the survey, most businesses in the US and Europe are not even aware of plans to develop real-time schemes: 81% of SME decision makers in the US have not heard about the The Clearing House’s (TCH) real-time payments scheme. In Europe, 55% of French businesses and 80% of those in Germany are not aware of any plans to develop a pan-European scheme.

Both the pan-European single euro payments area (SEPA) instant credit transfer scheme (SCT Inst) and TCH’s Real-time Payments System pilot will be launched later this year. The pan-European SCT Inst Scheme is due to go live in November and will enable consumers and businesses to make euro credit transfers in real-time between accounts across an international area – eventually spanning over 34 European countries.

“Our findings show that businesses are ready for real-time payments,” added Kislingbury. “The new schemes in the US and Europe will be the most comprehensive real-time payment systems ever developed.

“However, financial institutions still have a long way to go when it comes to educating customers about the benefits and opportunities the new schemes offer. Banks that are now educating and raising awareness of their real-time offerings are those that are most likely to benefit from the new opportunities moving forward.”

YouGov took findings from 1,255 adults for the online survey, which was conducted in February 2017. All respondents were senior decision makers in SMEs with up to 250 employees.

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