Here are the week’s main news stories in the world of small business and e-payments:
Octopus partners with Mastercard for online payments
The company behind the Octopus Card e-payment system is to launch a virtual prepaid card for online shopping as it attempts to reinvent itself while facing punishing competition in the cashless transactions marketplace. Sunny Cheung Yiu-tong, the CEO of Octopus Holdings, said the Hong Kong firm would join forces with Mastercard, and would issue the new payment option in the first quarter of next year. Tying in with the company’s e-wallet offering, O! ePay, the virtual card will require users to top up credit before it can be used for shopping online. The maximum credit limit is expected to be HK$10,000.
Small businesses could face VAT hike under EU withdrawal plans
Campaigners have warned of a VAT shock for small businesses if Parliament approves UK Prime Minister Theresa May's EU Withdrawal Agreement in a vote this month. Proposed changes to EU rules would reduce the threshold for the small business exemption for charging VAT from an annual taxable turnover of £85,000 to £76,700. The People's Vote campaign for a second EU referendum said the change would force hundreds of thousands of traders to slap VAT on their products and services for the first time. A parliamentary report released on Christmas Eve warned if the Withdrawal Agreement is ratified and the changes to EU directives go through, the UK would be forced to lower the threshold even if Brexit has happened.
Google Payment expands into Europe
Google Payment has obtained an e-money licence in Lithuania, which will enable Google to process payments, issue e-money and handle e-wallets. The licence, granted by the Lithuanian central bank, gives it permission to operate throughout the EU. Currently, Google Pay allows customers to store card details in a digital wallet that is used to make purchases online or in an app. It also allows customers to use their mobile phones as payment devices in a store. While an e-money license allows a company to store and transfer customer funds electronically, it does not allow it to offer full banking services, such as deposit accounts, loans or mortgages. Lithuania is positioning itself as one of the fastest-licensing jurisdictions for e-money in the EU, having granted 39 licences, second only to the UK’s 128 licences.
Irish SMEs in line for €75m boost
The SME sector in Ireland is set for a €75m cash injection via the Strategic Banking Corporation of Ireland (SBCI). The SBCI was set up to ensure favourable loan rates reached SMEs, by funnelling state-sourced money through banks and other lenders, which could then pass on the benefits. The €75m package is going to Finance Ireland, a non-bank entity, and will be used to boost Finance Ireland’s offering in areas like hire purchase and working capital products. Finance Ireland chief executive Billy Kane said: “the SBCI funding has been a significant benefit to the many hundreds of SME customers we deal with on a daily basis, and this new facility will ensure that benefit continues into the future”.
Scottish small businesses unprepared for climate change
Small businesses in Scotland feel unprepared to cope with the effects of climate change. According to a survey by WWF Scotland, just over three-quarters of larger businesses feel they are either fully or partly prepared for the effects of rising global temperatures, but the figure dropped to just 39 per cent for smaller businesses. Meanwhile, only 15 per cent of smaller businesses agreed they had received clear direction from the Scottish government on how they can help mitigate climate change, compared to 49 per cent that did not. But among companies with more than 250 employees, WWF Scotland found that 66 per cent felt they had received clear direction from the government.