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News Round-up: Political uncertainty concerns SMEs, tougher bank disputes scheme backed by Chancellor, Japan considers e-money salary payments

Here are the week’s main news stories in the world of small business and e-payments:

Small businesses concerned by persistent political uncertainty

Small UK businesses have raised concerns about weak economic growth, consumer demand and high lending rates in the latest Federation of Small Businesses (FSB) Small Business Index (SBI). Amid persistent political uncertainty, the domestic economy is named most often as a growth constraint by small businesses. Close to six in 10 (58 per cent) said it is a significant barrier to growth, up from 55 per cent at this time last year. Access to appropriately skilled staff (36 per cent), lack of consumer demand (29 per cent) and labour costs (21 per cent) are also frequently flagged as primary barriers to growth.

Japan considers e-money salary payments

The Japanese government is reportedly considering allowing firms to pay salaries in electronic money. The move comes before Japan opens up to more foreign blue-collar workers in April. These workers are expected to face hurdles in opening bank accounts as they lack domestic assets and transaction histories. In addition to e-money that can be added to integrated circuit (IC) cards and smartphones, deposits to prepaid cards and smartphone apps will be considered. Cryptocurrencies are likely to be excluded. Most employees in Japan currently receive salaries in cash or through bank transfers.

Chancellor backs tougher bank disputes scheme for SMEs

Chancellor of the Exchequer Philip Hammond has called on banks to strengthen a proposed redress scheme for small businesses. A dispute service proposed by UK Finance, which represents banks, must include a broad range of interests and not impose a compensation cap, Hammond said in a letter. The voluntary scheme was proposed in response to a decade of campaigning by small firms who say they were mistreated by their banks in the wake of the 2008 financial crisis. It is aimed at companies with a turnover above the eligibility threshold for taking complaints to the Financial Services Ombudsman.

Amazon sales boost for 200,000 SMEs

Amazon has said it helped more than 200,000 SMEs generate more than $100,000 in sales in 2018. Of those, 50,000 generated more than $500,000. A smaller group, those earning over $1 million in sales last year, grew by 20 per cent.

An Amazon spokesman said the growth of SMEs in Amazon’s storefronts has “enabled business owners to create new products, provide greater selection to customers, and reinvest in their local communities through job creation”.

Amazon said more than a million businesses in the US use its platform, as well as many more across 130 countries.

Square launches debit card for small businesses

Payments company Square is launching a free debit card for small businesses intended to help them better manage their cash flows. The Mastercard debit card will allow companies to spend funds from sales they have processed via Square’s payments systems as soon as they have made the sale. This gives business owners quicker access to sales proceeds rather than waiting for the funds to be transferred and reach their bank account.

Alyssa Henry, seller lead at Square, said sellers can get “stuck in a cash-flow crunch” and the Square card is “geared toward helping solve that pain point”.


MIT, Stanford and others to build blockchain payments network to rival VisaNet

Seven major US universities, including MIT, Stanford, Carnegie Mellon and University of California, Berkeley, are working together to develop a digital currency network that solves blockchain's scalability and performance problems. Funded by a Swiss-based non-profit organisation, the Unit-e cryptocurrency application and its blockchain-based payment system is expected to launch in the second half of this year. If successful, it would surpass the transactional capability of mainstream financial networks like Visa's VisaNet.

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News Round-up: Political uncertainty concerns SMEs, tougher bank disputes scheme backed by Chancellor, Japan considers e-money salary payments
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