Here are the week’s main news stories in the world of small business and digital payments:
SME bank Allica granted banking licence
SME-focused bank Allica has been granted a banking licence by the Prudential Regulation Authority (PRA) and will be regulated by the PRA and the Financial Conduct Authority. Allica has been built with the sole aim of enabling SMEs to advance their business using the two fundamental principles of tailored support and financial expertise. Allica is now planning for a full launch and will ultimately offer working capital solutions and cash management, including loans, savings, payment services and asset finance.
Half of SMEs still visit a bank branch at least once per week
Half of SMEs in the UK and Ireland (51 per cent) visit a bank branch at least once every week, but online business banking is used more, according to the Close Brothers Business Barometer research. In total, 12 per cent of businesses said they use a physical bank daily and 39 per cent use one every week. A further 31 per cent visit a branch monthly, while 11 per cent report doing so less than twice a year. In comparison, 76 per cent use online banking for their firm at least once a week, with 41 per cent saying they use it every day. These results suggest there is a significant overlap and, while companies may opt to go online for some transactions, each type of banking is not used exclusively.
Worldline to host digital payments contest
Payment and transaction services provider Worldline will host the e-Payments Challenge 2019 in Frankfurt from 17–19 September. Following the success of the inaugural event in Paris last year, this year’s gathering will bring together fintech start-ups, Worldline experts and industry leaders to co-innovate and shape the future of payments. For this year’s e-Payments Challenge, 25 fintech start-ups have been pre-selected to join the challenge and will have the opportunity to partner with Worldline to scale their business, pitch their solutions to Worldline’s clients and establish important business relationships.
Stripe launches lending service and credit card
Payments technology provider Stripe is launching a lending service for “internet companies” to get faster access to funds. The lending service will initially be offered to US-based companies and will focus primarily on online businesses such as e-commerce companies and software providers. According to Stripe, Stripe Capital will determine loan eligibility using data from its extensive business network, in which “advanced algorithms analyse hundreds of relevant signals for each business, including payment volume, percentage of repeat customers, payment frequency, and changes in revenue growth”. The company has also launched a corporate Visa credit card for business customers. Users are expected to pay their balance in full each month, with Stripe making money through an interchange fee for transactions.
Starling Bank adds insurance and cybersecurity to business marketplace
Starling Bank has added SME insurtech Digital Risks and cybersecurity platform CyberSmart to its business marketplace. The two new partners are part of Starling’s strategy to expand its marketplace in order to provide business customers with the tools they need to set up and grow their operations. Accessible from within the Starling app, the two complementary products will allow customers to manage more of their business admin from one place.
Grab aiming to merge Indonesian e-payments firms
SoftBank-backed ride hailing company Grab is reportedly in talks to merge OVO, an Indonesian digital payments firm in which it owns shares, with an Ant Financial-backed local peer to better compete against arch-rival Gojek. A deal could help OVO-DANA dominate Indonesia's multi-billion-dollar online payments market. OVO and Gojek have been vying for the top spot in payments since 2018, with DANA not far behind. Grab and Gojek compete in a host of areas, including financial services, e-commerce, ride-hailing and food delivery.
Digital payments coming to Venice waterways
Venice public transport company AVM Holding and payment technology company SIA have signed an agreement to create a digital platform that will allow residents and tourists to buy tickets using payment cards and smartphones on board the ‘vaporetto’ boats, where the crew will be equipped with 650 Android SmartPOS terminals. The new service, which AVM Holding expects to launch by the end of the year, will significantly improve ticket payment and issuing procedures, making the experience simpler, faster and more secure for residents and the millions of tourists getting around Venice every year.