European organisations bemoan slow, outdated and costly transaction settlement times but lack a thorough understanding of payment processes, a survey from banking as a service (BaaS) provider Vodeno has revealed.
Vodeno quizzed more than 2,000 decision-makers from European SMEs in the UK, Belgium, France and the Netherlands to understand more about the challenges faced in the current payment ecosystem.
Sixty-two per cent of Europe’s SMEs cite delayed and unpredictable cashflow as the biggest challenge their business currently faces, while 54 per cent have had to take out a loan due to missing and delayed payments.
Sixty-two per cent also said that costly foreign exchange (FX) contributes to yet another drain on their resources.
Due to delays, more than half (52 per cent) said that they have failed to meet business commitments. Yet, only 37 per cent of managers within European SMEs know what a payment rail is and how it works.
Only 10 per cent of SMEs said that payments are processed instantly, while 11 per cent said that the process happens within the hour. Most commonly, (35 per cent) international payments take between two and three days to reach SMEs, with 11 per cent waiting between four and six days, and four per cent waiting between one and two weeks.
In the next 12 months, 68 per cent of respondents said that they intend to adopt real-time payment processing capabilities, enhancing their available cash flow in the current macroeconomic climate. Timely, with sixty-two per cent saying their SME must urgently modernise its payment processing capabilities.
Tom Bentley, CCO of Vodeno, said: “Long settlement times, delayed transactions and a lack of transparency in the payments space can cause headaches for businesses – particularly small and medium enterprises (SMEs) who typically have fewer reserves to draw upon when disruptions occur.
“Our research shows that these organisations rank missing payments amongst their most significant challenges, with many taking drastic measures to stay afloat.
“In the current macroeconomic climate, cash flow can mean the difference between survival and insolvency, and unpredictable payment processing is the single biggest disruption to business operations. Banking-as-a-service (BaaS) offers new innovations, better solutions, and the ability to make real-time payments a reality for more businesses.