B2B Payments

Capital One Collaborates To Encourage SME FinTech Adoption

High-tech tools for the enterprise are no longer reserved for the largest, most cash-rich organizations.

In recent years, innovators have begun to focus on the small business, enabling SME owners to adopt more simplified and affordable solutions, like eInvoicing or cash flow management solutions.

This democratization of technology began only a few years ago, right around the time Capital One launched its small business services unit, Spark Business, in 2011. Since, the FI has developed its own suite of solutions for SMEs, but while technology has become more available to entrepreneurs, actually getting those small businesses to integrate innovative tools is its own hurdle.

“I think one of the biggest challenges of the small business owner is having the time to research and discover these platforms and for the technologies themselves to be transparent and understandable in the limited time they have,” Greg McAllister, VP of product and business development at Capital One, recently told Karen Webster.

Indeed, in the most recent PYMNTS.com SMB Technology Adoption Index, the stats suggest that, while small business owners are certainly intrigued by the newest technologies available to them (entrepreneurs rank themselves fairly high on a technology adoption scale), only 13 percent said they are willing to innovate in the realm of the payment technologies they use.

Capital One’s own research, released via its Spark Business Barometer, found that “keeping up with technology” was cited by a quarter of small businesses as their top concern, surpassed only by cash flow management and taxes as their top concerns for 2017.

Capital One Spark Business is today announcing a new effort to push SMEs over the edge from being interested in FinTech to actually adopting it. The unit is now looking to establish an ecosystem of SME FinTech partners — the first of which, announced today (Jan. 10), are business payments firm Bill.com and SME HR company Gusto. According to McAllister, the collaborations are part of a broader effort to change the tone of the conversation with small businesses.

“A lot of what we’re working towards is simplifying the explanation and understanding, of securing those partnerships, to make it clear what the value proposition is,” he said. “I think it’s about awareness, time to educate and the time to sort through all the options and find the best solution for themselves.”

Offering small businesses new technologies, like eInvoicing, bill presentment or payroll solutions, isn’t enough, the executive added. Entrepreneurs need to have a discussion with their financial service providers about what these solutions are and how to integrate them into existing operations. The education aspect of SME financial services is “critical,” McAllister said.

There are a plethora of reasons why small businesses struggle with technology adoption.

Of course, one of the largest is the fact that many SMEs simply don’t have the time and financial resources to research and procure these tools. But another challenge, McAllister added, is that the definition of a “small business” is hardly straightforward.

“As a segment, it’s very broad and ranges from the micro-merchant to somewhere in the $10 million range of revenue,” he said. “It’s a vast spectrum of how complicated that business is and how complicated the relationship with money is.”

The executive admitted that the sheer variety of the companies that fall under the “small business” category is one of the largest hurdles for financial service providers to actually get their products and services not only understood by small business owners but implemented. The language and tone a financial service provider deploys when speaking to one of its SMEs is important to the educational aspect, McAllister noted — it’s about getting into the same frame of mind as an entrepreneur to understand their goals are and what would be considered a victory. After all, 10 percent year-over-year growth may mean very little to a large corporation, but to an SME, it can be make-or-break.

Luckily, McAllister told Webster, small businesses are sitting pretty in the new year.

“As far as sentiment is concerned, I think most feel the conditions for small businesses are good,” he said.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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