Blog Post

5 Fintech Trends SMBs Need to Embrace or Risk Falling Behind

Though smaller businesses have a lot of disadvantages compared to large enterprises, they can gain an advantage with these five innovative fintech trends. 

Small and midsize businesses face unique challenges that many of their larger brethren can readily overcome.

Enterprise-level companies benefit from innumerable resources and deep pockets, while small companies must constantly discover solutions that help them maintain a competitive edge with lower overheads.

As such, it is unsurprising that many financial technology, or fintech, innovations are rapidly adopted by startups and other small businesses long before acquiring mainstream recognition.

Even so, finding the right fintech solutions requires a blend of reading tea leaves and understanding broader technological trends.

To stay competitive, small businesses must keep their ear to the ground and uncover solutions that will improve their services, optimize their processes, and keep them lean enough to generate profits.

These five trends are set to change the game, and SMBs would be wise to embrace them, or run the risk of being left in the dust of more tech-forward competitors.

1. Better transaction and payment processing

One of the big focuses of fintech has been in the payment processing arena.

Whereas traditional credit card processors and PayPal were once the exclusive channels for companies seeking to handle digital payments, new entrants are quickly challenging their more established peers in the industry.

Companies such as Stripe and Payoneerhave thrown their hats into the ring, offering lower fees, fully digital solutions and more efficient processing times. While many consumers still use credit cards, offering alternative payments that remove this middleman can result in better prices for end users.

Additionally, it can open up SMBs to a broader audience that may not have access to traditional payment methods, or those that prefer to work entirely through digital payments and e-wallets.

More people are shopping online than ever before, with digital purchases across a wide swath of industries expanding rapidly.

By adopting these payment solutions early, companies can position themselves for long-term success.

2. Alternative sources of funding

As recently as a decade ago, most startups and small businesses had few options for raising capital outside of brick-and-mortar institutions.

They could offer up part of their companies to venture capital firms or angel investors, or they could find an institutional lender for a complicated loan process. Recent fintech developments have added a faster, less complicated solution.

The rise of lending as a service (LaaS) allows small business owners without the creditworthiness or financials to qualify for a traditional business loan to access new financing options.

LaaS platform Ezbob, which offers perks such as instant approval and same-day funding, provides companies with an instant source of cash flow to finance their expansionary needs. Moreover, with a transparent process and reduced overheads, Ezbob and its peers can offer more competitive rates and terms.

While applying for loans is never risk-free, these few lenders give SMBs an alternative borrowing option. Apart from the advantage of having access to precious capital needed to thrive and grow, these choices empower owners to retain complete control of their companies.