Banks Need To Target Small Businesses For Online Payment

In the next one to three years, banks plan to support online payment processes for small and medium sized businesses.

Banks are failing to provide the online payments capabilities that small businesses desire, according to a survey by MineralTree, a software company that provides online payments solutions to banks. The survey, “Small Business Banking Report: SMBs Still Paying with Paper – And Begging Banks for a Better Way,” found that the majority of small and medium businesses continue to use paper checks to pay for bills, while 70% of say they want to eliminate the process and go paperless.

Eliminating the need to write paper checks interested 68% of small businesses and 89% of small businesses that use accounting software.

Previous research released this year by MineralTree indicated that banks have a growing interest in attracting small business customers, with 88% of banks in a survey saying they plan to target small businesses in the next one to three years.

However, many of the banks in that survey said that they weren’t meeting the payments needs of their small business customers, with only 35% of them claiming that they are doing a good job in meeting payment needs for small and medium sized businesses.

The new research shows that banks are missing out on the opportunity to attract small businesses by failing to meet their payments needs. Seventy-two percent of small and medium sized businesses in the new survey responded that they were handling booking internally and only 9% are using online bill payments.

According to the report, “small business leaders are focused on running their businesses, and look to trust vendors, like their banks to suggest innovative news approaches.”

The survey of 300 small and medium-sized businesses was conducted this past September by MineralTree and Bredin, a sales and marketing B2B agency.

Zarna Patel is a staff writer for InformationWeek's Financial Services brands, which include Bank Systems & Technology, Insurance & Technology and Wall Street & Technology. She received her B.A. in English and journalism from Rutgers University College of Arts and Sciences in ... View Full Bio