Half of UK SMEs are frustrated by delayed bank payments
Nearly half of UK small and medium businesses say they are frustrated by delayed payments reaching their bank accounts. 48% of SMEs surveyed by YouGov and ACI Worldwide said they had been frustrated by delayed payments and the study also found that this had negatively impacted the ability of SMEs to conduct their businesses successfully.
Some of the negative impacts of late payment include:
- Affecting their ability to meet their own financial obligations (cited by 33% of respondents)
- A negative impact on elements of staff up-keep such as salaries, expense reimbursement and recruitment (17%)
- An impact on the levels of funding available for business requirements such as equipment, product development and research (10%)
Almost all of the small businesses surveyed believed that real-time payments would be useful to them. 95% said they would like to see real-time payments and more than a quarter (29%) said that faster payments would be the most important banking improvement they would like to see in the current economic environment.
Despite this, around a quarter (24%) of SMEs in the UK were unaware of the existence of the Faster Payments Service. This is a banking initiative that aims to reduce payment times between different banks' customer accounts from three working days using the BACS system to no more than a few hours. It is also generally much faster than using business cheques.
Regarding other new products offered by their banks, nearly two thirds (64%) of SMEs surveyed said that mobile and internet banking had made the most positive difference to their businesses.
Other newer products and services had so far has less of an impact however. Biometric security had failed to register with 91% of respondents and 86% said contactless payments had a minimal effect.
Alternative finance options can be extremely valuable for smaller businesses who are having difficulty securing funding through traditional routes or who just want to widen their choices. 86% said alternative financing had not yet had a significant impact on their businesses.
By Phil SmithView all Business Insights