Krzysztof Hoffman, Head of Payments, Vodeno
Small and medium enterprises (SMEs) play a vital role in the business economy – they make up 99% of all EU businesses and account for more than half of Europe’s GDP. The lifeblood of any business is to be able to reliably send and receive real-time transfers, yet many SMEs are particularly vulnerable to the effects of delayed payments.
However, the idea that delayed payments are just something that all companies have to deal with is false, and Banking-as-a-Service (BaaS) providers are innovating the payment space, making fast and secure payments accessible to more businesses.
Payments are at the core to making a business a success, and a real-time payment solution – that is also cost effective – is ultimately the northstar that should be made available by providers to all businesses, big or small.
Finding the facts of real-time transfers
The most direct impact of delayed payments is cash-flow challenges – 52% of respondents to Vodeno’s most recent survey said that they have failed to meet commitments due to slow payment processing. 62% said that delayed and unpredictable cash flow is their business’s biggest challenge, while 23% say that this has hindered their international growth.
With 43% of SMEs worldwide ramping up operations overseas, these payment issues could prove a major barrier to growth. In fact, 54% of respondents stated that their company was forced to take out a loan as a result of missing payments that caused a disruption to cashflow.
As a result, almost three-fifths (57%) of European SMEs surveyed said that they were planning to change their payment provider in the next 12 months. Given the value real-time payments can add to a small business, it is encouraging to see so many actively planning to make a change in the near future.
Additionally, 62% of respondents said that they must urgently modernise their payment processing capabilities, while 68% say that they plan to adopt real-time payment processing capabilities in the next year. Among those that intend to switch, the most important factors were speed and ease of payments (37%), cost-effectiveness (35%), and security guarantees and compliance standards (29%) when choosing a payment rail.
Making the right choice
With many BaaS providers to choose from, knowing what to look for is crucial to making the selection that will prove best for your business in the long term for real-time transfers. Our solution offers single API integration that automatically selects the most efficient payment rail for each transaction, ensuring the fastest possible settlement with the lowest possible costs. In addition to access to all SEPA schemes (Instant, Credit Transfer, Direct Debit), we also offer access to local payment rails with virtual IBANs possible for mass payment needs.
Currently, the payments ecosystem is seeing tremendous innovation, and our research suggests that most SMEs are on the right track to take advantage. While real-time payments have still not reached critical mass, we are doing our part to make it more accessible and cost-effective for all businesses.
Krzysztof Hoffman, Head of Payments, is an expert within the payments industry with significant fin-tech, Open Banking and Banking as a Service experience. He has led the Transactional Banking Product team within ING responsible for the development of payments products and services. In his current role, Krzysztof is responsible for building the Payment Platform for Aion/Vodeno, with extensive experience in transformation, banking and operations. Hi has end-to-end Product Management and development responsibilities for all components of Payments Platform across 16 countries offering access to the solutions based on the PaaS and BaaS.
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