Here are the week’s main news stories in the world of small business and digital payments:
Businesses leave SME supplier payments to last
Businesses pay their smallest suppliers 30 days later than their bigger suppliers. Data released by Previse, a fintech that uses AI to get suppliers paid instantly, shows slow payments are concentrated among small suppliers. An analysis of over 10 million invoices (representing more than £24 billions of spending by some of the UK’s largest buyers) shows that, while late payments are rife throughout the supply chain, the smallest suppliers are paid 30 days late while firms charging the biggest fees are paid, on average, less than a day late. Suppliers invoicing for a value less than £10,000 per annum are not even processed by buyers until 35 days after being received, on average, while large supplier invoices were prioritised.
Chinese sovereign digital currency gets legislation boost
China looks set to become the first major nation to launch a digital sovereign currency: the digital yuan. The country’s Digital Currency Electronic Payment (DCEP) project, which has been running for five years, will use of blockchain technology and see the currency distributed through so-called digital wallets. While the timing of the launch remains unclear, the country’s parliament has just passed a new cryptography law according to Chinese state media; the legislation focuses on blockchain – a key technology used within digital currencies. The move is interpreted as an important milestone for a digital currency although it does not explicitly refer to cryptocurrencies.
JP Morgan plans e-wallet service for customers
JP Morgan is reportedly working on an e-wallet to help companies handle payments better and become more like banks. JP Morgan is aiming to help companies like Airbnb, Lyft, and Amazon.com give customers virtual bank accounts and “offer perks such as car loans or discounts on home rentals to those who keep money stashed there” to foster customer loyalty. In return, these companies will pay less in payment processing fees, and JP Morgan gets guaranteed payment processing and money handling for these companies.
RBI seeks bids for pilot projects in retail payments
The Reserve Bank of India (RBI) has invited applications to test new products and services for retail payments under its regulatory sandbox scheme. The sandbox enables new financial products to be piloted with restricted availability. The window for start-ups, banks and financial institutions to submit applications is from 15 November to 15 December, after which the RBI will select the most suitable ideas. The RBI said the adoption of retail payments is “expected to spur innovation in digital payments space”. The RBI set up the regulatory sandbox in August to facilitate the development of innovative products for retail payments, digital Know Your Customer initiatives and wealth management.
Multimillion pound boost for small businesses
Small businesses across the UK could be set to benefit from a £56 million funding boost designed to drive productivity. The cash injection comprises £11 million to create a Small Business Leadership Programme, £20 million to strengthen networks and focus on business improvement, and £25 million to expand Innovate UK's Knowledge Transfer Partnerships (KTP) programme. The KTP will involve getting more than 200 additional graduates with relevant skills placed into businesses with complex management issues to translate their research insights into business growth.
Worldline aims to link bitcoin and Swiss retailers
European payment infrastructure provider Worldline has teamed up with financial services firm Bitcoin Suisse to allow cryptocurrency users to spend their bitcoin in Swiss shops. Worldline last year took over SIX Payment Services, the former arm of the Swiss stock exchange group that provides payment card terminals to 85,000 Swiss retail outlets. The French company now wants to hook this infrastructure up with cryptocurrencies. It has signed a letter of intent with Swiss crypto company Bitcoin Suisse, which will act as a go-between, converting bitcoin into Swiss francs, which will then be used to pay for goods and services in Switzerland. A pilot project is planned for 2020.