Technological innovation in the SMB space
In the realm of lending automation, digital technologies are enabling new lenders to process high volumes quickly and restructure loans at minimal marginal cost. Open banking technologies are accelerating credit line scoring and improving onboarding processes.
Data visualisation and insights are becoming increasingly important, with rich performance-level insights being made available to SMBs to help them manage their businesses more effectively.
“Fintechs, such as accountancy software providers, are delivering dashboards to give SMBs a more holistic view of key performance metrics to help track cashflow and working capital positions,” Visa’s report reveals.
Many new players in the SMB space are actively looking to help businesses pursue their growth ambitions. This support extends beyond financial and operational insights to include assistance with extending online presence, enhancing working capital capabilities and improving efficiencies.
Embedded finance is another area of rapid growth, with B2B embedded finance payments in the US market alone expected to surpass US$2.6tn by 2026 – a three-fold increase since 2022. This growth is driving new collaborations, such as Visa’s recent partnership with Taulia to enable the use of payment credentials for enterprise payments made through SAP’s ERP platform.
Card-based innovation continues, with virtual cards seeing significant growth driven by B2B transactions. “Virtual card spending is expected to grow more than fourfold to reach US$13.8tn between 2023 and 2028,” notes the VCA report. New security features, improved user experience and enhanced reporting capabilities are driving this growth.
In the area of acceptance innovation, solutions like Tap to Phone are presenting low-cost alternatives for SMBs to drive acceptance growth. The global contactless transaction value is expected to exceed US$10tn by 2027, with 94% of all smartphones globally being NFC-enabled.
As the SMB banking and payments landscape continues to evolve, financial institutions and fintechs must adapt their strategies to capture the opportunities presented by this dynamic market.
The report concludes: “Understanding customer needs, developing targeted capabilities, optimising existing customer portfolios and creating innovative roadmaps will be crucial for success in this rapidly changing environment.”
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