An online survey has found that 48% of UK small to medium-sized businesses are frustrated with delayed payments reaching their business bank accounts.
The research, carried out by YouGov and ACI Worldwide, also found that delayed payments negatively impact the ability of SMEs to conduct their businesses successfully.
The findings reveal a number of ways in which delayed business payments are negatively affecting wider business success:
● 33% of respondents say late payments affect their ability to meet financial obligations on time
● 17% feel late payments have a negative impact on staff up-keep including salaries, expense reimbursement and recruitment
● 10% note access to finance is limited for business requirements such as equipment, product development, and research
Given the negative impact of payment delays, it is not surprising that almost all small businesses surveyed (95%) believe real-time payments would be useful to them. In fact, over a quarter of respondents (29%) highlight faster payments as the most crucial banking service to business success in the current economic environment.
Barry Kislingbury, Director of Solution Consulting at ACI Worldwide said: “For small businesses, delayed and unpredictable cash flow can significantly affect their success. Our research presents a great opportunity for banks working with these businesses to demonstrate the value of their real-time payments offering. This will not only help them grow in the medium-term, but will also strengthen the overall economy in the future.”
The majority of businesses prefer bank transfer (67%) as their method of payment from customers. Bank transfer is supported by Faster Payments, the only UK banking service that significantly reduces payment times between banks and customer accounts.
Since its launch in 2008, the Faster Payments service has been made available to 52 million current account holders in the UK as it is offered by ten major banks and building societies and over 400 other financial institutions. Despite this, nearly a quarter of small and medium-sized businesses (24%) are still not aware of the initiative and its benefits.
Amongst new financial products banks are now offering their customers, SMEs say that mobile and internet banking (64%) have had the most positive impact on their business, according to the survey. However, the majority of SMEs feel that many of the new products offered, such as alternative financing (86%), P2P payments (89%), biometric recognition (91%) and contactless (86%), have had minimal effect on their business so far.