Here are the week’s main news stories in the world of small business and e-payments:
1. EU backs payments platform to reduce financial exclusion
A digital platform to provide a secure, instant and user-friendly method of payment that will enable the unbanked population to participate in the global financial economy is being funded by the EU. The Billon project is based in Warsaw and addresses the limitations of existing systems, which are often centralised and have high maintenance costs that are passed onto customers as bank fees. The platform will use a blockchain-based instant pay-out system and distributed ledger technology to create free current accounts that are able to make low cost payments with real currencies.
2. SME investment at risk from interest rate rises
Research by United Trust Bank found that 61 per cent of asset and property financiers believe another 0.25 per cent increase in the Bank of England’s base interest rate could stifle investment in SMEs. However, 37 per cent of respondents said that a base rate of one per cent would have little to no effect on SME investment. Martin Nixon, head of asset finance at United Trust Bank, said:
“Responsible business owners will have factored in some eventual upward movement in interest rates, and with funders continuing to offer attractive terms and forward-thinking SMEs still wishing to take advantage of opportunities, I don’t think there would be a major setback were another increase to come about later in 2019.”
However, he added that another base rate hike before Brexit combined with continued uncertainty over the UK’s future outside of the EU, could cause some businesses to “pause and take stock”.
3. Three-quarters of SME owners losing sleep over their business
A large majority of SME owners (76 per cent) are losing sleep over their business according to research by Opus Energy. Concerns keeping small business owners awake included company finances and costs (35 per cent), work/life balance (27 per cent) and attracting customers (24 per cent). In addition, 79 per cent of SME owners are making personal sacrifices for their business with more than a third (36 per cent) saying they have sacrificed personal time in the past year, 31 per cent reducing their holidays and 29 per cent going without pay. Just under a quarter (23 per cent) said they work while on holiday, with 14 per cent not even taking holidays to address their business.
4. Small business confidence hits record high in US
US small business confidence is at record levels thanks to a strong economy and deregulated business environment, according to the latest CNBC/SurveyMonkey Small Business Survey. However, the research also revealed that small businesses are wary of the potential for an international trade war and a tightening job market. With 58 per cent of businesses surveyed saying business conditions are ‘good’ (up from 39 per cent a year ago), a third plan to increase their headcount in the next 12 months. Small business group the National Federation of Independent Business and Wells Fargo/Gallup on Main Street found similar levels of business confidence in their own research.
5. London SMEs plan to increase philanthropy efforts
Small businesses in London are planning to increase support to local charities, with research conducted on behalf of national charity OnSide Youth Zones suggesting that 80 per cent have plans to do so. This is despite two-thirds of SMEs in London saying they don’t currently support charitable organisations in their local borough or London more widely, favouring national or international organisations instead. Of the SMEs planning to increase support for charities in their local communities, 27 per cent will focus efforts on fundraising activity, 28 per cent will make cash donations, 17 per cent will volunteer and nine per cent are set to offer pro-bono services. The research found that most London SMEs provide support to charities worth more than £10,000 per year.