Impetus for switching: SMEs favor banks that offer real-time payments
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.
Over two-thirds (71%) of all respondents stated that if banks offered real-time payments capabilities, it would ‘encourage’ them to switch providers.
The research reveals the extent to which SMEs in the US and Europe are willing to embrace new payment methods and innovative banking services. It also shows that businesses increasingly recognize the value of fast, efficient and predictable payments to the overall success of their business.
Banking in real-time is a priority for many SMEs: Of the respondents that find faster payments appealing, 71% said that they would find receiving payments from customers in real-time important, with 59% saying the same about paying vendors and suppliers in real-time. 43% of SME businesses surveyed 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 the last few 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 payment providers such as PayPal.
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 amongst businesses in the US and Europe (57% globally).
“2017 will be a crucial year for real-time payments globally,” comments 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, the majority of businesses in the US and Europe are not even aware of local plans to develop real-time schemes: 81 percent of SME decision makers in the US have not heard about the TCH real-time payments scheme.
In Europe, 55 percent of French businesses and 80 percent of those in Germany are not aware of any plans to develop a pan-European scheme.
Both, the pan-European SEPA Instant Credit Transfer Scheme (SCT Inst) and The Clearing House (TCH) Real-time Payments System pilot will be launched later this year. The pan-European SCT Inst scheme is due to go live in November 2017 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,” says 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."