Nearly two thirds (59 per cent) of UK small businesses confirm that they trust their business bank or building society to be their payment provider, according to a survey of 750 company owners by Visa Europe.
While alternative providers are emerging, trust in these institutions to deliver payment functions remained much lower, such as trust in a telecoms company (11 per cent), social media provider (6 per cent) or alternative online payment providers (40 per cent).
Trust in banks is most strongly held by sole traders, 65 per cent of whom have a fully trusting relationship with their bank or building society.
Likewise, longstanding businesses have a higher level of trust; 65 per cent of businesses trading for more than 20 years identify their bank as a trusted provider.
While trust levels are high, many small businesses reveal they aren’t fully satisfied with the payment options available to them. For example, only 30 per cent of owners are ‘completely satisfied’ with the range of options available.
This rises to 40 per cent of sole traders, but remains relatively low. Satisfaction levels also decrease as company turnover rises, suggesting as businesses grow they are looking for more options to offer customers.
Kevin Jenkins, managing director of Visa UK, says that the banking and payments proposition for small businesses is different and has to be treated so, with resources scarcer and the time to invest in and consider these kinds of issues typically less.
‘The impact is the same regardless of business size though. If small businesses feel frustrated or unable to utilise the best payment or banking offering for them and their customers, then they can’t enjoy the benefits these bring,’ he adds.
‘Given the top three barriers to change are cited as perceived cost, risk, and other priorities being focused on, that suggests we need to start with making these products as accessible and useful for this audience as possible.’
There are also clear differences between the comfort level of businesses paying in new and different ways, versus accepting these payment methods themselves.
Sole traders for example, have embraced making online payments; well over half (56 per cent) use online banking to make payments and a third (32 per cent) make payments via debit card online.
Yet only 9 per cent of this group accept online card payments to their own business from customers. Similarly, 36 per cent of all small businesses use debit cards to make payments for their business, yet only 22 per cent accept payments this way.
This frustration at lack of payment options, and the gap between payment behaviour and acceptance, doesn’t appear to be a case of traditional providers failing to innovate though.
Banks are listed more often than alternatives, such as internet providers, as the ‘preferred partner’ for transaction services. Indeed, 46 per cent of small business owners describe their bank as the ‘ideal’ provider for these services, suggesting a different barrier is the main impediment.