B2B Payments

Surveys Show It's A Good Time To Be A (US) Small Business Owner

Small businesses (SMBs) in the U.S. are increasingly optimistic. Expectations about economic growth, and increases in their own revenues, make for a good time to be a small business owner in the country. In the U.K. and Australia, though, small business sentiments look a bit different. This week's B2B Data Digest looks at the numbers behind small businesses' optimism (or pessimism), as well as new stats about adoption of technology like payment services and machine learning (ML).

Seventy-three percent of small business owners want only one payment service provider, according to Mercator Advisory Group research. However, 25 percent of those companies are working with more than one payment service vendor, which introduces complexity to managing suppliers and integrating processes and data, analysts said. In its report, Mercator spoke with BlueSnap CEO Ralph Dangelmaier, who noted that business customers often vocalize their need for streamlined, integrated processes, which calls for the need to work with a single payment service provider that can support multiple platforms and channels.

More than 70 percent of small business owners currently use applications to run their apps, making it the most common technology currently deployed within these firms, according to the Small Business Expo's latest Bi-Annual Trends Report. While current adoption of artificial intelligence (AI), ML, chat bots and virtual reality (VR) remains low, more businesses expect to deploy those tools in the coming year, the report revealed. Interestingly, about one-fifth of the 400 business owners surveyed disagreed with the sentiment that emerging technologies like AI benefit their business models.

Fifty-three percent of professionals told Capital One that their firms aren't using mobile apps to view or manage commercial card transactions, or to submit travel expenses, resulting in a market gap for commercial card and corporate payment companies. Capital One surveyed the professionals at this year's NAPCP Commercial Card & Payment Conference, and found one quarter of businesses that do use an app connected to their commercial cards or travel expenses still prefer to use a web application, suggesting poor implementation of the app solution yielding another market opportunity for app developers, researchers said.

Fifty-three percent of SMB owners predict to grow this year, up from 46 percent in 2017, according to TD Bank. The financial institution's (FI's) annual Small Business Survey collected responses from 578 small business owners and found 45 percent feel "extremely confident" about managing their finances, and 71 percent said they would feel confident that they would be approved for credit if they applied. Only 16 percent of those surveyed said they had been rejected for a loan because revenue was too low, according to TD Bank. The survey also found that traditional FIs remain the most popular destination for financing.

Forty-one percent of Aussie small firms seek financing for short-term cash flow needs, according to the Australian Bureau of Statistics (ABS). Thirty percent, meanwhile, wanted financing to invest in equipment or machinery. Most small business loan applicants went to a bank, reports said, with 16 percent of SMBs surveyed seeking funding between 2016 and 2017. Of those, 89 percent received finance. Reports in Finder said it's no surprise that businesses are in need of help to maintain cash flow, with earlier surveys highlighting Aussie SMBs' struggle with cash flow restrictions and its consequences, including payment delays and financial visibility.

Twenty-four percent of SMBs in the U.K. agree that banks 'fail to prioritize [SMB] needs,' FinTech firm Fraedom found in its latest survey of 1,000 small business owners. Whereas TD Bank's survey suggested small firms are feeling optimistic about access to bank loans, only 12 percent of U.K. firms surveyed by Fraedom said they felt banks can fully handle their business requirements, and nearly half agreed that banks should simplify their lending processes in an effort to improve the bank-SMB relationship. More than one-fifth said they prefer a more personal, consumer-focused approach to banks' customer engagement.



Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.