FinTechs offer a bridge between banks, small and medium-sized enterprises

Small businesses have found it difficult to keep up with digital innovations in payments and financing. Banks also face challenges in developing and implementing systems scaled to small and medium-sized enterprises (SMEs) digital payment innovation.

FinTech comes to the digital rescue and develops solutions including networks to bridge the gap.

For example, global B2B payments firm TreviPay’s newest payment network seeks to enable banks to help small businesses accelerate digitization. The Small Business Supplier Network (SBSN) promises the benefits of automation to small businesses, including increased sales force, while minimizing costs with a Software as a Service (SaaS), cloud-based solution.

According to a press release from the company on Tuesday (August 9), SBSN is the industry’s first payment network built for US banks and their small business customers.

PYMNTS research has found that small businesses lag behind their larger competitors in terms of FinTech adoption. Cost is one of the biggest barriers. To the extent that networks can reduce the tax costs of entering the digital age, they have the potential to accelerate small business adoption and promote SME competitiveness.

There are many reasons for small businesses to adopt modern FinTech. According to the TreviPay website, small business benefits include:

• Debt-free liquidity to help small businesses eliminate accounts receivable and increase cash flow – just like card merchant services, but designed specifically for B2B transactions.
• Making small businesses more bankable by strengthening their cash flow and balance sheet.
• Enhanced growth potential based on network capabilities including:
• • Eligible business customers
  • 100% online processes with real-time decision making
  • An alternative to swiping to authorize a card payment
  • Receive real-time payments
  • Provides risk-free payments
  • Dispute handling
  • Debt-free payments

TreviPay distributes the network exclusively through banks who in turn will offer the network as a “white label” offering to small business customers, so small businesses interested in joining the network must check with their financial institutions for availability.

According to the company, the platform allows banks to set the fees for the service to SMEs in the range of existing card merchant services (2% to 6%). SMEs will evaluate network participation competitively and negotiate the best price.

Banks have compelling reasons to use such offers. According to the company’s website, small businesses are a huge opportunity due to the low adoption of payment technologies. Banks face competition from FinTech disruptors and have a powerful incentive not to be left behind.

Billions in B2B trade credit flow through small businesses annually. TreviPay says SBSN delivers a new structured finance solution to enable banks to capture this market opportunity. According to research commissioned by TreviPay, US small businesses with 100 or fewer employees provide approximately $5 trillion in B2B trade credit to their corporate and government customers each year when they allow them to pay on invoice terms (e.g. net 30, 60, 90+ days ). ) — the original “buy now, pay later”. Extending trade credit to business customers is common and often considered necessary to remain competitive, attract new or larger customers and deepen existing relationships, all while building loyalty and driving retention. However, small business suppliers still fund most of the trade credit they provide from their own working capital. This prolonged, inefficient use of their limited cash flow is ultimately a hindrance to their growth and resilience.

According to the company’s website, the benefits for banks of using such networks to embrace evolving financial services for SMEs include deepening customer relationships, strengthening customer retention, driving growth, establishing sound risk structure, built-in compliance and rapid implementation without expensive and time-consuming system integration.

Networks like SBSN offer both banks and small businesses an opportunity to digitally transform their back office operations quickly without investing the enormous time, effort and capital required to build solutions in-house.

Both banks and small businesses must be able to adapt shelf solutions to meet unique sector and vertical market needs. TreviPay says that the SBSN solution allows such adaptation by all parties involved.