How business needs are driving (Instant) Payments Innovation.

According to the World Bank, Small and Medium Enterprises (SMEs) and businesses account for the majority of commercial companies worldwide and are important contributors to job creation and global economic development. Contributing up to 40% of national income in emerging economies, they represent about 90% of businesses and more than 50% of employment worldwide.

SMEs will play a particularly important role in the post-pandemic future as human ingenuity and the need to secure a living income will drive new enterprises forward. Technology will be a vital part of that process, with entrepreneurs looking for new ways to meet customer needs for products and services.

The opportunity for financial institutions will be to harness the potential created by the growth in SMEs with modern payment rails, and providing value-added services that reflect the needs of the evolving SME segment. Rather than the current product-centric approach, financial institutions need to find ways to establish themselves at the centre of how a business operates, not just enable it to pay or be paid.

As payments capabilities are commoditised, FIs’ income from providing such services is eroded over time, making it even more compelling to understand and serve their business clients’ needs.

The key is to understand how very different SMEs operate, and what they expect from their FIs. SMEs increasingly are disposed to rely on software-as-a-service (SaaS) models to run their businesses, whether that’s cloud-based finance or outsourced HR and payroll services. They don’t have the large data centres, in-house experts, or technology infrastructures that large corporates invest in, but they do have the same technology needs to support their business and to use data analytics to take the uncertainty out of their financial futures.

This white paper from Finextra, in association with Fiserv, will focus on the problems and challenges SMEs grapple with, and how they can operate more effectively when armed with the right toolkit. Such use cases will demonstrate the products and solutions FIs can create with the power of instant payment rails and overlay services.

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