This post was originally published on Fin Extra
What are the main pain points of SMBs when making B2B payments? How do SMB payments needs differ across different verticals, and what are the payment channels they predominantly use? Why is tailoring SMB propositions to specific sectors crucial for issuers, and what are the commercial outcomes that can be driven through verticalisation? What are some of the successful use cases of issuers tailoring SMB propositions? And how can financial institutions learn from these to optimise their positioning, acquisition channels and customer engagement?
SMBs and their payments-related needs present an opportunity of untapped potential for issuers. The B2B payments market is expected to grow from $1.7 billion in 2023 to $4.2 billion in 2033 – and SMBs are a valuable segment of this market share. However, their payments needs often differ from larger organisations, and issuers can benefit immensely from understanding how and why.
SMBs in the agriculture, manufacturing, or construction sectors specifically have vastly different payments needs than SMBs in other verticals. Issuers can optimise their propositions by understanding the payments pain points of these customers, and tailor their offering accordingly.
For example, adapting repayment terms and lending capabilities to match often volatile production
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