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News Round-up: SME cash flow struggles, Singapore government digital payments, cashless society by 2024

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

Almost half of UK SMEs struggle with cash flow

Nearly half of UK SMEs (44 per cent), roughly 2.5 million businesses, are struggling with cash flow as they attempt to prepare for Brexit, according to a new report from Bibby Financial Services. Its latest SME Confidence Tracker from Q2 this year found that 29 per cent of SMEs are now actively using funding, up from 23 per cent in the previous quarter. Of the 1,000 SME owners surveyed, 72 per cent are investing an average of £16,400 more than predicted as of the end of the first three months of the year and 69 per cent are preparing to invest further in Q3. Half of UK SMEs think there will be a recession this year and they have turned to quick-fix funding, with 26 per cent using credit cards, bank overdrafts and borrowing from family and friends.

Nearly half of SMEs believe cash will no longer be used by 2024

Nearly half of SME decision makers in the UK and Ireland believe society will be virtually cashless by 2024, according to research by Close Brothers Invoice Finance. In total, 47 per cent think we will live in a cashless or virtually cashless society. A further 36 per cent believe the split between cash and card will remain the same and only 17 per cent think the use of cash will increase. Even today, digital channels are the most common way for businesses to be paid: 39 per cent of SMEs say they mainly take payments online using cards. Benefits of digital payments cited by SMEs included more secure payments (40 per cent), reduced threat of physical theft (23 per cent), and easier accounting (31 per cent).

Singapore adopts digital platform for government payments

Singapore’s government agencies are to accept and make payments via the global digital payments service PayNow. When the system is up and running, it is expected that citizens will be able to complete 90-95 per cent of transactions with the government using the platform. PayNow requires knowledge of only the payee’s mobile number or personal identification number to transfer funds, and has grown to become one of the world’s most widely accepted digital payment systems. Singaporeans will be able to use it to pay school fees and traffic fines, for example, making payments by using their banking apps to scan QR codes.

Government takes steps to avoid no-deal Brexit business disruption

The government will start automatically enrolling companies in a key customs system as it ramps up preparations for a no-deal Brexit. More than 88,000 companies will be allocated an Economic Operator Register and Identification (EORI) number in the next two weeks, according to the Treasury, with 72,000 firms already registered. EORI numbers are used by non-EU member states to allow them to import or export goods into or out of the bloc. Chancellor Sajid Javid said: “There can be no time for delay, which is why HMRC has allocated thousands of businesses with a trading number to ensure they can continue to trade their goods through Europe from day one.”

SME growth predictions on the rise

The majority of UK SMEs predict no change in growth over the next few months, with some forecasting modest growth, showing an overall upturn in growth predictions, according to research from Hitachi Capital Business Finance (HCBF). Offering a snapshot into SME expectations for the autumn months, HCBF’s Business Barometer suggests that, for the three months to 30 September, 49 per cent of UK SMEs will hold their position, with 35 per cent predicting growth, and only 16 per cent forecasting contraction or decline.

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News Round-up: SME cash flow struggles, Singapore government digital payments, cashless society by 2024
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