Editors note: this article is mostly for our readers in the United Kingdom, but it applies to our readers in the United States as well.
FinTech has opened up a whole new world of opportunities for SMEs so that they are now able to offer more and better services at a lower price.
From money transfers to personal and business loans, business current account management and even assets management, FinTech is rapidly taking over the way entrepreneurs do business.
Here’s a quick guide on how FinTech is changing the business world.
Payment Processing
These days, more and more retail customers tend to use plastic to pay. In fact, only 40% of all transactions in the UK in 2016 were made using cash. Other digital payment methods, such as mobile wallets, offer customers alternatives to cash payments.
Providing alternative and effective methods of payments is one-way FinTech is helping small businesses. Businesses can avoid the risk of carrying physical cash, while at the same time providing their customers with diverse payment options that will ease the way business is being done.
Track expenses and monitor cash flow
In order to be profitable, small business owners must be able to monitor their income and control their expenses. To this end, it is important to have an accounting system that tracks your cash flow in real-time to ensure the smooth running of your company.
Quite a number of FinTech companies have introduced investment and cash flow tracking software as well as online tools. Such apps are free, and you don’t need specialized IT and accounting expertise in order to use them.
More financing options
To order to start and expand their companies, small business owners need money. Over 50% of businesses stated they would need external funding for their company between 2018 and 2019.
Banks and FinTech firms have tried to deliver a variety of services to meet this huge market, ranging from conventional small business loans to capital raising, revenue-based financing, and small business-specific credit cards.
A feature of this effort is that some or all of the application process was done online so that business owners could consider their choices quickly and easily.
Effective banking options
Digital and mobile banking technology, also created by Fintech, makes it possible for business owners to quickly deposit checks or transfer funds without the need to go to a local branch.
Also, “robo-advisors” generated by developers offer lower rates than a financial advisor and provide clients with better returns.
Fintech is also making international payment and transfers quicker and less expensive than ever before, too. For example, there are apps and programmes that help online sellers save money on transfer fees and conversion charges when it comes to sending money or receiving money abroad.
Improved accounting
Fintech lets small business owners keep track of taxes, investments, salaries, bonuses, and more.
Applications like FreshBooks, QuickBooks Online, and Sage Accounting, are simple digital accounting tools that small business owners can use to take control of their finances wherever they are in the world.
Final thoughts
The rise of FinTech opened up a world of new opportunities. Small and medium businesses taking advantage of Fintech programmes and apps can offer their services effectively and cheaply, while at the same time enjoying huge savings.
Therefore, entrepreneurs and small businesses need to keep abreast of developments in FinTech as it has grown to become a vital part of their business dealings.
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Image source, Marco Verch,Via Flickr.
Image license: Creative Commons 2.0.
