A new merchant survey by Elavon, a global payments provider, reveals that UK small-to-medium businesses (SMBs) are increasingly agile and adept at dealing with uncertainty, as they navigate an external environment which is increasingly hard to predict. The research, conducted in February, highlights that despite fiscal challenges, a significant proportion of UK businesses remain positive about the future. Just over half (54%) express optimism about the UK’s 12-month economic outlook, while 82% of businesses are confident in their ability to grow in this period.
Looking ahead, merchant businesses are prioritizing investment across innovation and collaboration to support their growth aspirations – 58% of businesses plan to invest in upgrading technology, 47% in enhancing customer experience and support, and 42% in investing in new partnerships.
There are some pronounced differences in confidence levels across vertical sectors. This is likely down to a multitude of external factors, including consumer spending patterns, supply chain dynamics and industry-specific sensitivities to an increasingly unpredictable market:
|
Sector |
Optimism about UK’s 12-month Economic Outlook |
Optimism about industry growth in next 12 months |
|
Automotive |
76% |
80% |
|
Leisure |
68% |
72% |
|
Hospitality |
58% |
60% |
|
Healthcare |
40% |
58% |
|
Retail |
27% |
45% |
|
Overall |
54% |
63% |
Businesses are hoping to see the government invest in policy and initiatives that foster a favorable environment for growth:
|
Sector |
SMB Top Priorities for Government Policy |
||
|
Greater Support for Small Businesses |
Tax/Rate Cuts |
Investment in Technology |
|
|
Automotive |
45% |
35% |
53% |
|
Leisure |
51% |
45% |
54% |
|
Hospitality |
69% |
51% |
27% |
|
Healthcare |
48% |
43% |
39% |
|
Retail |
62% |
43% |
30% |
|
Overall |
56% |
43% |
40% |
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“UK SMEs are facing a multitude of challenges. While sentiment remains positive, it’s clear that small businesses are looking for additional support and are prioritizing investments to insulate their businesses against headwinds,” says Hemlata Narasimhan, President of Europe, Elavon.
Businesses have identified late payments, security and fraud, keeping up with innovation, and chargebacks as key concerns. Nearly a third (30%) consider late payments a primary concern, and 45% have noticed an increase in late payments over the past six months. In terms of payment-specific issues, security and fraud is cited as the top issue (40%), while over a third (34%) of businesses are concerned about keeping up with payment innovation and 33% worry about chargebacks.
To mitigate these payments challenges, the UK’s SMBs are busy investing in contactless and alternative payment methods to lay the foundations for smoother payments processes that will benefit both cashflow and the user experience on offer to their customers. Over the past year, 50% of businesses have adopted contactless payments through digital wallets, 40% have implemented contactless payments using debit and credit cards, and 34% have sought a more innovative payment provider to manage cash flow.
“Businesses hesitant to adopt new technologies may risk falling behind, particularly in a highly competitive landscape,” says Hemlata Narasimhan, President, Europe at Elavon. “Payments modernization can unlock a wealth of new opportunities for the UK’s small businesses, from streamlining operations, enhancing customer experience, to opening up new revenue streams.”
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