Small to mid-size enterprises (SMEs) account for 99 percent of all European businesses, provide two out of three of the private sector jobs, and contribute to more than half of the total value-added created by businesses in the EU. But despite the fact that small and midsize businesses make-up so much of the economic landscape, there are many processes within these organizations that remain dated. One of those archaic processes that plague many small businesses today is payments.
If you’ve ever started, or worked for a small company, you understand that often times, you need to wear many hats. There is lots of work to be done, and usually there are not enough people to get it done. You do the best you can, with the technologies available. But, according to research from Atradius, more than one-third of all B2B payment delays in Western Europe are caused by complexity of the payment procedure or inefficiencies of the banking system. Clearly, attention must be paid to new payments technologies by SMEs.
When it comes to payments, many SMEs use a manual process to pay their employees, and bills. The cumbersome paper payments process requires a high volume of paper checks, expensive bank / wire payments, and a high potential for loss and fraud. According to the Association of Certified Fraud Examiners, payroll fraud happens two times as often in companies with less than 100 employees.
So what is the solution? Card-based payments. By switching from archaic, legacy payments processes to a corporate payment card platform, SMEs can pay employees, partners, vendors and more via prepaid cards. The primary benefits include:
- Cut costs with reduced paper, postage and re-issuing of lost and stolen checks
- Improved end-user experience thanks to more timely payments, with funds available right way and in multiple currencies, if needed
- Enhanced reporting and better compliance; and in the EU funds are held in the segregated accounts which are separate from issuers’ own operating funds.
- Cheaper than bank accounts and consumers have better access to their funds even if they don’t have a banking relationships
Not only are prepaid cards more convenient, they are also becoming a mainstream, viable personal banking option, especially among millennials. Banks are charging more for checking accounts and increasing minimum balance requirements, causing more and more consumers to move away from traditional banking relationships.
Want more info on card-based corporate payments? Check out mychoicecorporate.com for more information.