Business Types – Small Medium Enterprises (SMEs)

Background:
SMEs can have simple payment needs for their Banks and PSPs, especially if they don’t sell direct to consumers, and their client base is essentially domestic. A straightforward UK GBP ac from their Bank should be able to meet most needs: payroll, access to BACS & Faster Payments for vendor/ bill payments, a GBP ac number for invoice settlement, plus access to currency payments for the occasion outward or inward payment to an overseas supplier or client. However, it is easy for a SME to lose track of the cost effectiveness of these payment arrangements, which will often be at a standard tariff..

Why is this important to businesses and corporates?
With so many additional payment types now being available from their Banks, plus new PSPs, a regular review on costs and options will often be worthwhile. Payment/ Collection types a SME should be considering:
• Cards (Visa, MasterCard, AmEx and local schemes) to enable direct selling as well as the option for on line bill settlement
• Inward Bank Transfer, using QR solutions for reconciliation, enabled on invoices
• Fintech solutions for cross border payments, especially where a number of payments originate to/ from the same currency
• Careful use of FX to ensure no excessive exposure is taken, yet being able to work with overseas clients in their local currency.
• For all payment types how efficient is the processing and reconciliation?

Questions a business need to consider include:
• Is the tariff for my payments & collections fair, against the volume and types of payments?
• How efficient and costly is it to send/ receive payments overseas?
• If you accept payment by Card, do you have an attractive rate and service from your provider? Any issues with Cards issued in overseas?
• Would international customers prefer to pay invoices issued in their local currency?