SMBs choose fintechs instead of banks

The lack of flexibility and adaptability in the old banking infrastructure is driving small and medium businesses (SMBs) around the world to adopt new banking and finance tools and platforms. The use of ‘new’ payment tools and services such as QR-based instant payments and digital wallets accounts for 17% of all business-to-business non-cash, according to French IT services firm Capgemini’s 2022 World Payments Report published on Thursday. Worldwide transactions in CY21, the increased pace of adoption of these new tools could lead to a quarter of all SMB transactions globally via non-legacy platforms. The companies surveyed businesses around the world, including India. The report echoes the rise of tools such as the Unified Payments Interface (UPI) of the National Payments Corporation of India (NPCI), which saw a year-on-year growth of 118 per cent in the June quarter of this year. As experts point out, factors such as no merchant discount rate (MDR) transaction fees, significantly shorter withdrawal cycles and more convenient international payments are increasingly contributing to the use of new instruments – unlike older banking services.