Here are the week’s main news stories in the world of small business and digital payments:
Malaysia tops up citizen e-wallets
Malaysia’s e-Tunai Rakyat programme has recently launched as part of a plan to boost the use of cashless payments by Malaysians. The government allocated RM450 million for the programme through the Shared Prosperity Vision 2030 agenda. Its goal is to reduce barriers to digitalisation and improve financial inclusivity. Three e-wallet providers are participating in the initiative: Touch ‘n Go e-Wallet, Boost and Grab Pay. Malaysians aged 18 years and above who earn less than RM100,000 annually are eligible to receive RM30 in e-credit each. All three of the e-wallet companies announced an increase in traffic coinciding with the launch of the programme. The monies obtained under the programme must be spent between 15 January and 14 March of this year and any unspent portion will expire after that period.
SMEs expect a good 2020
This year will be a good year, according to UK SMEs. A new report from BT found the majority of SMEs (57 per cent) are confident in the economic outlook for the year. About a third (30 per cent) of 1,000 UK SMEs surveyed believe their growth will be better this year than it was in 2019. It’s not all sunshine, though. A third (30 per cent) of respondents expect revenue and profit to drop, and 58 per cent are concerned about costs and operational efficiency. Being able to use advancing technology appears a factor in the level of optimism. “There is a clear indication that SMEs that are able to harness the potential of technology feel a greater sense of business confidence,” said Chris Sims, managing director of commercial and marketing at BT.
India fights fraud with new card safety rules
The Reserve Bank of India, in a move intended to reduce digital payments fraud, has directed banks and card issuers across the country to disable online payment services of all credit and debit cards that have never been used for online/contactless transactions. The rule comes into effect 16 March, 2020. After that time, any cardholders who have not used their cards for contactless or online payments will need to reapply for these services. India has more than 800 million debit cards in circulation and upwards of 50 million credit cards. The rule is intended to protect the interest of rural citizens, who are considered more susceptible to digital fraud. In future, card activation must be done at contact points, with the card physically present, according to a circular from RBI. “At the time of issue/re-issue, all cards (physical and virtual) shall be enabled for use only at contact-based points of usage (viz ATMs and point of sale devices) within India”, said the directive. The RBI has also asked issuers to re-assess for risk all cards that have used contactless/online payments.
Lenders tighten purse strings
The big banks are cutting funding to the little guy. Data from business lender iwoca found that lending to SMEs in Great Britain decreased by eight per cent between 2014 and 2018. Perhaps more troubling still is that the worst-hit areas are those in the poorest regions of England. SMEs in well-off areas actually saw increases in lending. The data, says iwoca, saw lending to small businesses in Blackpool – the most deprived area in England, according to government statistics – falling by 27.6 per cent. The least-deprived area, Wokingham in Berkshire, saw an increase in lending of 18.2 per cent. Small businesses in the wealthiest areas of England were able to borrow £2 billion more than those in the poorest parts of the country, despite having similar populations. Small Business Minister Kelly Tolhurst said: “We’re backing businesses right across the country. £7 billion from the government-owned British Business Bank is supporting over 91,000 SMEs, the majority outside London and the South East, and our Northern Powerhouse Investment Fund has invested over £135 million in smaller businesses across the North of England. But we are determined to do more to level up across the country.”
DBS offers food and beverage SMEs B2B epayments
Singapore’s largest banking group, DBS, has launched a new QR-code-based epayment solution for the B2B market, specifically those in the food and beverage (F&B) industry, including a large number of SMEs. Through multiple digital workshops with F&B companies, DBS found that nearly nine in 10 B2B payments in that sector were either cash-based or using bank transfers. The solution offers instant payments and automated account reconciliation to users. Joyce Tee, group head of SME at DBS Bank, said the bank is looking to bring B2B epayments to the island’s SMEs sector by sector. “Many SMEs we speak to want to realise productivity gains by becoming more digital but they don’t have the expertise or infrastructure to do so. By understanding their pain points and then laying the foundation for enhanced payments capabilities one sector at a time, DBS aims to lead the way in digitalising and streamlining the payments landscape in Singapore. Our aim is to enable our SMEs’ time-strapped workforce to be able to spend more time serving their customers and exploring new business opportunities.”