When it comes to money in our personal lives, we are accustomed to immediacy, efficiency, convenience, and security, whether paying a bill or managing our finances. The same cannot always be said for small businesses, yet the ability to effortlessly and securely manage money increasingly underpins their success. Thankfully, digital innovation is narrowing the gap.
Digitisation enables small and midsized businesses to pay and get paid faster and more securely than ever, and it is dramatically re-shaping how entrepreneurs build and run their businesses.
Small businesses are a vital backbone of our global economy – encompassing 90 per cent of businesses and more than 50 per cent of employment worldwide – and Visa’s priority is to help them thrive every step of the way.
In 2023, the “consumerisation of business finance” will benefit small businesses in big ways as they work to meet the pressures and opportunities of an uncertain economic environment. And following are five related trends we see as pivotal for small businesses.
First, small businesses can win the war for talent with heart. Small businesses have inherent disadvantages when it comes to attracting top talent: the lack of a company gym, cafeterias offering free meals, or complementary transit or parking. But they can and should compete in other ways. They can provide employees with better work-life balance and a greater sense of personal purpose – two qualities a Gallup poll found almost as important to potential employees as salaries and benefits. Small businesses would do well to ensure every talent touchpoint – website, social media, marketing collateral – drives a personal, professional and optimized experience that reflects their values. Customer testimonials, employee stories, etc. will help small businesses differentiate themselves from their competitors – large and small – and appeal to a talent pool that remains highly competitive.
Second, closing the digital equity gap will continue to drive small business competitiveness. The World Economic Forum predicts that 70 per cent of new value created in this decade will be based on digitally enabled technologies. With livelihoods and well-being increasingly determined by participation in the digital economy, this rapid transition can provide opportunity for everyone, everywhere.
We need to include small businesses in this discussion so that people can pay conveniently, easily and securely and so that businesses can reach new customers, run more efficiently and grow. This will also increase business resilience, be it in times of economic downturns or a big external shock like the pandemic.
In the early days of the pandemic in 2020, Visa set a goal to digitally enable 50 million small and micro businesses by the end of 2023 to support recovery from the pandemic. I’m thrilled to report that we have helped digitally enable over 40 million already. In Asia Pacific, Visa’s partnerships with acquirers and payment facilitators on our SMB Acceptance Fast Track Program have enabled over 60,000 small merchants across 8 markets to accept digital payments.
Third, small- and medium-size business will need to put trust and security at the top of their agenda. Small businesses, because of their high touch, community orientation and accessibility, are the single-most trusted institutions in the United States. According to a Gallup Poll, 68 per cent of respondents rated small businesses as trustworthy, compared with 17 per cent of large enterprises.
Trust is fragile and needs to be nurtured. Security lapses can have lasting consequences for a business, and because of their perceived vulnerability, small businesses can find themselves at significantly higher risk of cyberattacks. To safeguard themselves and their customers, small- and medium-size businesses should prioritise ensuring they are utilizing the proper security technology. Tokenized payments and industry standards can help reduce fraud by securing the payment environment, both online and at physical points of sale.
Fourth, a 360-degree approach to digitisation will be a key asset for small- and medium-size businesses. How a small business pays its vendors, suppliers and partners is as important as how it receives payments from customers. While consumer payments can get most of the attention, digital solutions have made it easier to automate and track payments to the outside partners who help keep a small business running.
In 2023, I expect to see small- and medium-size businesses embracing the “consumerisation of B2B payments.” Small- and medium-size businesses will continue to set themselves up for ecommerce and online payments, but also increase their focus on embracing financial tools and apps that can help with planning, cash-flow, budgeting, expense tracking and tax preparation, among others. As these apps become increasingly integrated, small business owners will be able to run their business largely from the palm of their hand.
Fifth, agility will be key in another year of uncertainty. Similarly to 2022, high inflation, workforce constraints and supply chain challenges will be a factor for all businesses, including small- and medium-size businesses, in 2023. Small- and medium-size businesses will need to be agile to succeed. According to Visa research, 86 per cent of surveyed small business leaders cite economic uncertainty as one of their most common stressors. Cloud computing, AI and digital financial tools can help small- and medium-size businesses navigate ongoing uncertainty.
If this sounds far afield, recent research has shown that 44 per cent of surveyed small business leaders are either integrating AI, preparing to, or closely following the trend. Although it’s early days, I am personally excited to see how ChatGPT AI can be applied to real-world scenarios for small- and medium-size businesses. If any of this feels overwhelming, know that acquirers and payment facilitators – who specialise in supporting small businesses nuanced needs – are there to help make this simple.
“Though in Vietnam, small- and medium-size businesses often give more weight to product improvement than business research and development, they are innovative and progressive adopters,” Dung Dang, Visa Country Manager of Vietnam and Laos, said.
“With Visa’s commitment to supporting local small- and medium-size businesses, business owners can confidently acquire digital finance with minimal effort. We are also set to organise an event “Vietnam New Flows Client Forum, Commercial Payment – The New Horizon” to assist businesses with 360-degree digital transformation along with our Fintech partners. Holding onto small- and medium-size businesses’ trust, Visa will continue our mission to reinforce small businesses amidst economic uncertainty.”
As a company that enables digital payments at more than 80 million merchant locations around the world, Visa’s commitment to small businesses is long-term and unwavering. Without a doubt, there is a tremendous opportunity for small businesses to grow and increase the resiliency of their operations.
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