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News Round-up: SMEs recognise people power, Hong Kong’s Octopus card ups stored value, small business lending declines

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

People the most important factor for SMEs

SMEs in the UK and Ireland believe people are the most important factor in their success, according to the latest Close Brothers Business Barometer survey. Considering what contributes to their business’ worth, 38 per cent of SMEs said their employees add the most value. This is true across all sectors and regardless of size, but companies with the smallest teams (between one and ten members of staff) are most likely to rate people as their number-one value-add (43 per cent). After workers, companies said products (22 per cent), brand (15 per cent) and assets (13 per cent) are key to their firm’s market price. Larger SMEs with more than 250 employees put more emphasis on brand, while smaller businesses with fewer than 61 people working for them say premises and property are most valuable.

Hong Kong Octopus card increases stored value limit

Shoppers in Hong Kong can now store up to HK$3,000 ($385) on their contactless Octopus cards, a three-fold rise from the previous limit. The operator of the electronic payment system, Octopus Cards, floated the plan three years ago when it renewed its licence on stored value facilities and said the move aims to cater to customers’ changing needs. Under the scheme, customers can also make payments of up to HK$3,000 at designated Octopus merchants, including Sogo, ParknShop and Wellcome Supermarket. More than 36 million Octopus cards and products are in circulation and the payment system handles 15 million transactions a day.

SME retailers losing out on bank lending

Bank lending to SME retailers has fallen by six per cent since the 2016 Brexit vote, while large retailers have benefitted from a 20 per cent increase in lending. Figures from accountancy firm Moore show that the total funds lent to SME retailers have dropped from £15.6 billion to £14.7 billion in the three-year period. Funds borrowed by large businesses have increased from £31.5 billion to £37.8 billion during the same period. Moore said SME retailers need finance to see them through the current volatile trading conditions and to invest to ensure their offerings remain contemporary. “Without that investment, smaller retailers risk losing more ground to bigger competitors and to e-commerce,” the company said.

New European Commission programme will help SMEs become greener

An ambitious European Commission programme is aiming to achieve a greener Europe by focusing on small businesses. The new administration is expected to encourage SMEs to embrace new technology and innovations to cut carbon, according to comments made at the annual SME Assembly in Helsinki. Kristin Schreiber, director of the COSME programme and SME policy, said: “Climate change has created a new political climate and for good reasons has impacted on policies. We are now looking at policies that are socially and environmentally sustainable. Under the so-called Green Deal coming with the new Commission it is necessary to look at different aspects of business.”

Half of SMEs unclear on 5G benefits

Half of SMEs (51 per cent) think the benefits of 5G are being over-hyped and exaggerated, according to research from business telecommunications provider Onecom. The findings are partly attributed to the fact that there is some confusion amongst SMEs around what 5G is and the benefits it brings. Some 22 per cent of SMEs describe their understanding of 5G as ‘average’ or as understanding it ‘not very well’, and only 29 per cent describe themselves as understanding 5G ‘very well’. Onecom CEO Ben Dowd said the research shows the telecoms industry “still has a lot to do in terms of not just explaining how 5G works but also the benefits it brings and how it could genuinely power growth for SMEs.

Poor Christmas could see one-fifth of small businesses shut down

Around one in five smaller businesses say they will close in the next 12 months if Christmas sales are below average, a new survey by Notonthehighstreet suggests. A poll of senior decision makers at SMEs showed that 22 per cent thought they would close within a year of a poor Christmas, with eight per cent saying this could happen within a matter of weeks. The vital Christmas period is seen as a bellwether of performance on the high street, with several larger chains also relying heavily on sales over the holiday period to prop up their top and bottom lines. The survey raises the possibility of more bankruptcies in 2020, after several well-known high-street brands closed their doors this year.

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News Round-up: SMEs recognise people power, Hong Kong’s Octopus card ups stored value, small business lending declines
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