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Digital payments could save businesses billions

01 May 2018 05:45

Recent research found that British firms could be missing out on up to £250 billion of cash flow because of slow and late payments. There are many reasons for this, but one of the crucial factors is related to delays in back office functions.

These delays affect businesses big and small by slowing down processes and creating inefficiencies. What can be a procurement headache for a larger company can be the much more serious matter of staying afloat for smaller businesses.

For example, recent Barclaycard research found that 63% of SME decision-makers are worried about their business’ cash flow with one-third saying insufficient working capital has prevented them from growing.

New technology is opening doors

We are moving towards a cashless society and digital payments could make things much easier for businesses. Fintech is having a massive impact on how companies are run, how they finance and how they plan. A proliferation of plug-ins, platforms and payments solutions are now connecting larger organisations with SMEs and democratising access to complex solutions that smaller businesses could have only dreamed of in the past. The adoption and integration of these technologies could be a good way to ensure a few more restful nights.

Digital payment solutions

One way ever-improving technology is helping is by solving the disconnect between how businesses buy things and how they pay for them.

From laptops to loo cleaner, the process of buying goods can be painfully slow, but moving the process onto one digital virtual payment platform can vastly improve efficiency.

Barclaycard Precisionpay reduces the number of suppliers you need to manage individually and the volume of payments that need to be reconciled each month.

The digital payment solution also gives greater control over cash flow because of the range of payments options available. It’s newest feature even allows direct bank transfers to suppliers who don’t take card payments.

Because it generates virtual card numbers for individual transactions, the system is also much more secure. Barclaycard Precisionpay can also integrate with a range of marketplaces; it’s generic API facilitates connections with more than 400 sales portals.

Online marketplaces

A recent survey found that 97% of US businesses still rely on cheques for business-to-business (B2B) payments, but there are huge opportunities to save time and money for companies that procure, invoice and pay electronically. Online B2B marketplaces are proliferating and are an example of how the process of finding and paying for services can be completed within minutes.

One fintech working with Barclaycard as part of the 2018 Accelerator powered by Techstars programme is Crowdz.

Crowdz offers an online B2B marketplace where businesses can pitch and procure work in real-time, rather than spending hours thumbing through catalogues and ordering over the phone or even via post. It goes further though by allowing SMEs to sell their invoices once they’ve got the work, negating the agonising wait to be paid.

Crowdz also digitizes the largely paper based documents associated with B2B purchases—like invoices, POs, and shipping details— replacing the costly and antiquated systems that most SMEs are still using.


Larger organisations normally insure against unpaid invoices, but often the process can take a long time to set up and is too expensive for SMEs. Nimbla, an insurtech start-up, is another member of the Barclays Accelerator programme which has a unique solution to give business owners more time to focus on growing with confidence.

Nimbla allows smaller enterprises to insure against even the smallest piece of work for as little as £5.60. It uses artificial intelligence to automate underwriting and credit controls giving SMEs a quote in seconds. It chases up debts using optimal email chasing systems and can even file a claim on their behalf.

This is the first time that single invoice insurance has been offered in the UK.

Crowd funding

The way businesses pay for day-to-day good is one thing, what about those who are just getting started and need to grow?

New regulations are making it easier to secure funding. There is the option to open up accounts onto new types of platforms to give new investors the chance to weigh up their proposition and carry out due diligence, often using artificial intelligence, within seconds. These platforms can even ‘smart match’ businesses with investors with expert knowledge in their field.

Crowdfunding is also huge. Many multi-million pound companies started off as modest crowdfunded projects. Facebook recently bought Virtual Reality company Oculus for more than $2 billion, but founder Palmer Luckey started off the project in his parent’s garage. He used Kickstarter and raised $2.4 million. While the product was still in its prototype stage, Facebook swooped.

Many ideas have captured the imagination of internet users and surpassed their initial targets within hours. Investing is never risk-free, but crowd funding allows innovators to test their idea by asking people to invest based on how much a product appeals to them. Innovations like Tile – an app which helps users find lost items - and SkyBell – which allows users to see, hear, and speak to the visitors at their door through an app – also started as crowdfunded side projects.

Online accounting

We are seeing a proliferation of online accounting platforms allowing smaller businesses to plug real-time sales data into their spreadsheet instantly. Ultimately, this can save hours spent pulling together invoices and receipts by recording transactions as they happen, whether incoming or outgoing. They also give businesses huge amounts of real-time data that allow them to evaluate their strategy and adapt on a day-to-day basis, rather than sifting through accounts at the end of the financial year and making retrospective decisions on what to prioritise in the year ahead. What’s more, the amount of plug-ins available is growing as well. Suddenly, catalogues, mobile banking and electronic invoicing can all so synced-up with cloud-based accounting platforms.

The power of more

New technology is exponentially growing to connect all businesses into the ecosystem, whether buyer or supplier. Many of these innovations were only affordable to larger enterprises, but it can now be used by all. Services are much quicker to find, as is paying and invoicing. New technology is also speeding up access to funding, accounting and making data analytics something everyone can get involved in. There is a world of opportunity for business owners to take more ownership of their success