Banks are ignoring the faster payment needs of small businesses

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Small businesses show no signs of slowing down and nonbank providers have historically provided the best payment solutions to help them grow. However, the market demand has not been solved yet.

Finding a fast and easy way to receive payments remains a top priority for these businesses. And yet, they are frequently left out of the industry’s faster payments conversation.

Most banks and credit unions are having executive-level discussions about Zelle and P2P payments, but only a few leaders are actively putting plans in place for small businesses. By neglecting this market opportunity, bankers are forcing their existing customers to seek financial help from nonbank providers such as Square, QuickBooks and PayPal, which have dominated this space to date.
Analysts and leaders might be ringing the warning bell, but bankers have been slow to respond. And soon, no answer to this market will be an answer; there is a slim window of opportunity to gain market share by leveraging an institution’s trust, relationships and services.

For many, the small-business market is uncharted territory—and the investment doesn’t seem justified when compared to retail and commercial businesses. And, once the cumulative value and growth potential in this market is realized, there is a hesitancy to bet on exactly which financial services are required.

Innovation in payments is the key to winning this valuable market segment. Often, time is limited and considered a luxury for the busy small-business owner. Juggling multiple solutions or paper-based processes for bookkeeping at the kitchen table night after night is time-intensive and exhausting following a long day of work. Time and effort spent managing finances takes the owner away from what matters most: running the business.

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Gig economy Payments Digital payments Small business Fintech ISO and agent