23 Feb SMEs Looking Forward: Money Movements & Blockchain
SMEs and the movement of money…
The way people use money and transfer their payments from one account to another has already changed dramatically, mostly at the front-end, in-app payment solutions. Nowadays users effortlessly make one-click payments and purchase goods via mobile devices or websites, Amazon and iTunes being the shinning prime examples of this.
This functionality is already available in many apps today yet it is at the back-end, systems such as accounting software where change is needed the most as they are less user-friendly and less integrated. For example, companies currently have almost no capability to make one-click invoice payments or easily manage their financial transactions between partners, suppliers and their bank with a fingertip. Having just set up a partnership payment agreement between NJMC and a cloud service company I can tell you that it was anything other than a quick one or two click process, it took me forty minutes and two tries. The process should be a whole easier.
This year we can expect to see more and more new solutions come onto the market that will allow companies to establish an end-to-end payments chain with their suppliers and customers. All SMEs will need to move quickly to embrace fast settlement systems, learning from the examples of the likes of Amazon where making payment quick and easy has been key to their business growth. Then towards the end of this year Blockchain is going to start to make its impact felt, and that is where life could well get very interesting indeed. NJMC‘s PMOaaS business will be in CeBit next month to look at these systems.
SMEs Looking to Blockchain – Creating trust in the digital age
According to Sage, Gartner, et-al, business builders should carefully analyse if, and how, the new blockchain technology could impact their current business models. No where does this apply more than in those industries which work as intermediaries between two parties – such as lawyers, notaries or real-estate or financial brokers could be affected by this new, innovative approach.
Book keepers and accountants will be affected in the way they do business in future, as blockchain has the potential to eliminate a significant parts of their current workloads, such as checking and booking transactions, transferring money or paying invoices. All these are handled by these professions today. SMEs in these fields need to act quickly in order to adapt to this coming new world. Adaption when you are a small business can be costly, time consuming and leaving you feeling alone and exposed but consider the impact of your small business being part of a greater co-operative (from my previous blog post on co-operatives), where you would have the strength of many, not just one.
Could Blockchain payments offer SMEs a way to side-step the profiteering of banks and the near monopolist practices of the two major card companies? The developing world certainly seems to think so. Entrepreneurs and SMEs in countries like South Africa and Nigeria see their growth coming from the poorest ends of their societies, but a stumbling block is the lack of access people have, and will ever have, to bank accounts. The Nigerian Oradian system is built on top of Stellar’s platform and allows 300,000 Nigerians (90% of them women) to cheaply transfer money between microfinance institutions over the Stellar network. It is not a smooth system yet but blockchain is developing and so is experience in it. Can you imagine the panic amongst the banks in the UK if suddenly 300,000 of the poorest citizens could perform financial transactions without their involvement and a cut of the money? Now imagine what would happen as everyone else and SMEs realised that payments and receipts for services no longer needed the banks.
- Blockchain is going to change how many of us work, and it will change it in a big way.
- One-click inter company payments are coming, if you are an SME make sure you are an early adopter.
- Blockchain and micropayment systems could open up new sources of customers that SME would be well placed to engage with so start developing Blockchain awareness, start watching the likes of Stellar.
- We in the “developed” world should be paying much more attention to the innovation and lateral thinking that is happening in Africa (and South America) because there is some serious innovation happening there.
It is going to be an interesting next year or two for SMEs.