Here are the week’s main news stories in the world of small business and digital payments:
Mixed fortunes for UK SMEs
The latest survey from the Federation of Small Businesses (FSB) found that the number of small businesses pausing recruitment and reporting falling revenues has reached record levels as Brexit uncertainty continues. More than a third of the 1,100 businesses surveyed reported falling revenues in the first quarter of the year – an all-time high. Export expectations for the next three months also fell to their lowest point in the nine-year history of the FSB small business index, while 90 per cent of firms put the brakes on recruitment.
In contrast, a ‘high potential’ group of more than 13,000 SMEs in the UK have experienced combined revenue growth of £44 billion over the last three years, according to research from investment firm BGF. In the three years to January 2019, 74 per cent of UK private companies with revenues of between £3 million and £150 million grew their turnover, achieving 15 per cent combined revenue growth. In addition, 65 per cent said they are actively hiring.
MoD reveals SME action plan
The Ministry of Defence (MoD) has outlined plans to increase its procurement spend with SMEs to 25 per cent by 2022. Its new SME Action Plan for 2019-2022 also details how the ministry will work with its strategic suppliers to remove barriers to supply chain engagement. Since the MoD last revised its SME policy in 2016, there have been a number key reviews in defence, including a refreshed Defence Industrial Policy, the Combat Air Strategy and the Modernising Defence Programme. All of these have stated an intention to better engage SMEs in defence procurement, without identifying the means by which this will be done.
Real-time payments market worth $39 billion by 2025
The global real-time payments market size is forecast to reach at $39 billion by 2025 with a compound annual growth rate of 29 per cent. That’s according to a new study by US market research company Grand View Research. Real-time payments are digital/electronic payments that allow the immediate transfer of funds in real time through a secured payment gateway. Ever-growing adoption of e-commerce and smartphones, coupled with the rising business need for fast and convenient payment solutions, are anticipated to fuel this market expansion. The Asia Pacific region is anticipated to see the highest compound annual growth rate over the forecast period.
Clydesdale and Yorkshire Bank Group surpasses SME lending target
CYBG, the owner of Clydesdale and Yorkshire Bank, has exceeded its target for SME lending in the second year of its commitment. The group provided more than £2 billion in lending support to UK SMEs, taking total lending to £4.05 billion in the first two years of its three-year commitment to help fuel SME growth. It has pledged to lend £6 billion over the three years to the end of December 2019. The bank lent money to about 7,000 SME businesses across the UK's regions, with more than 90 per cent of lending focused on regions outside of London.
Public transport e-payments should boost adoption
The launch of SimplyGo, which allows commuters in Singapore to use their credit or debit card to pay for their bus or train fares, is expected to boost overall debit and credit card use. Consumers in Singapore who use their credit or debit cards to pay for rides on public transport are more likely to increase their overall contactless spend by 51 per cent, according to research by UOB bank. The research covering 1,000 individuals found that consumers who choose e-payments for transit also plan to do so for other small-ticket items traditionally paid for in cash, such as paying friends (83 per cent) and grocery shopping (82 per cent).
Irish e-money licence secured by Stripe
Payments platform Stripe is set to expand its Dublin base significantly after securing an e-money licence from the Irish Central Bank. While Stripe cited Brexit as a factor in its decision to apply for the licence, the company noted that its desire to expand its Dublin operation was the overriding reason for the move. “Dublin is the heart of Stripe in Europe. It’s our fastest-growing office and our first international engineering hub with over 150 employees,” a company spokesperson told the Irish Times. The company, which runs a platform that allows companies and individuals to accept online payments, set up its first engineering hub outside the United States in Dublin last year.