In UK, SMB Mistrust Of Alternative Payment Firms

UK banks

A new study by Visa Europe finds traditional banks hold sway over tech-driven alternative payments providers — at least, for small business owners in the United Kingdom.

There seems to be a trust issue among small to mid-sized entities in Europe.

Specifically, in the United Kingdom and, specifically, when it comes to payment providers.

On Monday (April 18), Visa Europe released findings from a survey of 750 small businesses based in the U.K. The overarching theme was that those outfits still maintain a significant level of trust in their banking providers, and at the same time, there are hurdles to be surmounted when it comes to embracing new payment methods. In addition, the research showed real differences in perception among varying parameters tied to those small businesses, ranging from size of the business in question to their geographic location.

The research itself was conducted by TNS between the timeframe of Oct. 23 and Nov. 13, 2015. Of the firms surveyed, said Visa Europe, the majority had an employee base numbering less than 100.

Breaking down the numbers a bit, of those 750 respondents, Visa Europe said that it found a bit less than two-thirds, or 59 percent, felt trust toward their business banking institution as their payment provider. That 59 percent tally far outpaced the levels of trust recorded and felt toward alternative online payment firms, at 40 percent, telecommunications providers, at 11 percent, and, bringing up the rear, social media providers, at 6 percent.

With firms that had a sole trader at the helm of the business banking relationship, trust was at its deepest level, with 65 percent of respondents in that role stating that they had a full level of trust for their banks or building society. The same level of response, at 65 percent, came in for firms that have been trading for more than 20 years, who also named banks as the most highly trusted provider.

Yet, a bit of disconnect came in with the same relationships between SMEs and their banks, even longstanding ones. The bedrock may be there, but there’s room for improvement. As Visa Europe found, a minority of small businesses — at only 30 percent — said that they remain “completely satisfied” with the options that are available; the number creeps up to 40 percent among the sole traders. And, the bigger the firms get, the smaller that satisfaction level gets. Regardless of the extent of alternative methods offered by the banking relationship already in place, the banks were designated the “preferred” partners in transactions across the board and, in fact, were listed by 46 percent of those participating in the survey as being the “ideal” partners, which perhaps illustrates a strong bond indeed.

Visa Europe also found disparity with acceptance of alternative payments, bifurcated between making payments and accepting payments. The research showed that the sole traders surveyed feel relatively more comfortable with online payments, as 56 percent use such conduits to pay and roughly a third of those sole traders use online debit cards. The number drops rather drastically when it comes to accepting payments, as a relatively paltry 9 percent let their customers use this option when making payments to the sole traders’ firms. The wider net shows some similar hesitation, as Visa Europe found that 36 percent of firms use debit cards to pay but only 22 percent say yes to customers paying using debit cards.



B2B APIs aren’t just for large enterprises anymore — middle-market firms and SMBs now realize their potential for enabling low-cost access to real-time payments and account data. But those capabilities are only the tip of the API iceberg, says HSBC global head of liquidity and cash management Diane Reyes. In this month’s B2B API Tracker, Reyes explains how the next wave of banking APIs could fight payments fraud and proactively alert middle-market treasurers to investment opportunities.

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