New research from Visa has revealed that the majority of small business owners still trust their banks’ payment processing abilities, despite a swathe of scandals and challenges – with sole traders holding financial institutions in particularly high regard.
Over half of small firm owners have faith in traditional payment providers, while just six per cent would trust a social media company with processing revenue on their behalf.
Believe in banks’ abilities was highest amongst founders of older companies and sole traders, with almost two-thirds of respondents in both groups trusting current account providers to manage payments as well.
Satisfaction when it comes to payment options trails behind trust levels, with less than one-third of all small firm owners satisfied with the choices on offer, and 40 per cent of sole traders happy with this.
The study also revealed that fewer than ten per cent of sole traders accept online card payments from customers, rising to 22 per cent of all small business owners – even though 36 per cent of the latter use debit cards for business spending.
“The banking and payments proposition for small business is different and has to be treated so. Resources are scarcer and the time to invest in and consider these kinds of issues is typically less,” said Visa UK managing director Kevin Jenkins.
“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. 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.”
Small business owners’ faith in traditional financial institutions for payment processing comes despite the struggles many have faced borrowing from banks in recent years, and in the face of the high proportion negatively affected by mis-selling of interest rate derivative products.
Speaking to Business Advice in December 2015, CEO of challenger bank Atom, Mark Mullen, told Business Advice: “The fundamental question is about who businesses trust. At the moment, that isn’t banks.”
Additional research published by the British Business Bank in February 2016 showed that young companies experience a 50 per cent rejection rate when applying for credit from traditional providers.
In the market for a business banking provider? Find out which are most favoured by other micro business owners.
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