Articles

Online and on the go

Published in AB+F Magazine
The increased use of smartphones by all sectors of the population is having a definite effect on the way people run small businesses, especially small nimble operators.

Small and medium enterprises (SMEs), particularly those at the micro end of the scale, are adopting new payment technologies in ever greater numbers. This will make for a tricky relationship with their bank, as expectations of increased security, service and functionality will accompany customer engagement. And with SMEs taking a much closer look at what their bank can do for them in areas such as digital payments, their advisers had better keep up to speed.

The Commonwealth Bank, with its emphasis on pushing its real-time banking offerings to mobile devices, is seeing a large uptake in users.

SMEs, particularly people running their own businesses, have embraced mobile technology for a long time, according to Kelly Bayer Rosmarin, executive general manager of business products and development at the bank.

“For most small businesses, the mobile phone is an essential ingredient in their success. So it should be no surprise [to find] they are using all the functionality that smartphones offer, whether it’s having more control over their calendar or having access to the internet and being able to look things up,” she said.

"Likewise, they are adopting banking technology. We’ve seen a huge rise in access to our internet banking platform through mobile devices, including tablets. I think that’s a reflection of people being able to check up on payments.”

Small businesses go mobile

While Bayer Rosmarin was unable to quantify her bank’s SME users, she said up to 30 per cent of the access to CBA’s internet banking is over smartphones and many of the bank’s SME customers were using these devices.

On the other hand, the bank’s medium to large business platform, Commbiz has added levels of security that preclude mobile phone access. “The non-SME customers have different security issues to deal with,” Bayer Rosmarin said.

She added that CBA launched an application recently which allows a business – particularly trades people and personal trainers – to take a payment on their smartphone or tablet without any add-in devices.

Bayer Rosmarin pointed out however, the problem with this system and indeed, the general use of online banking facilities to pay SMEs on the spot, is that not all banks have real-time banking platforms, instead choosing to run these as overnight batch payments.

Therefore, the pressure is on the banks to provide ever-improved devices and services.

“I think there will be interesting developments in the peer-to-peer space, but probably not using SMS-based systems (such as the M-SEPA system in Africa). This is a rather inefficient way [of transferring money] when we have so much internet capacity in Australia,” she said.

At least one of the credit card majors is thinking along the same lines. “There’s a lot of work going on through our MasterCard labs to develop mobile phones into point-of-sale devices to accept credit card payments. We haven’t seen any of these in the market here yet, but there’s a lot of development in that area,” said Eddie Grobler, divisional president of MasterCard Australasia.

“I’ve seen applications on mobile phones in other parts of the world where a mobile can be used to process a credit card transaction. It’s early days for this technology, but it’s developing,” he added.

Grobler said this technology will be particularly useful in an SME environment for people like “tradies” who can accept a card when the job is done.

Insecurity over mobiles

For mobile payments, SME’s anecdotal reluctance to become involved can be put down to natural fear, as happens with any new or emerging technology, and is not well founded, said Bayer Rosmarin.

“In terms of how the banks’ SMEs store their own customers’ data, that’s been challenging. And there are rules around PCI compliance, which is there to guide companies on safe ways to use data and what to store and what not to store. Those guidelines set out pretty clearly what needs to be done.”

Bayer Rosmarin also suggested the question of security should be looked at in terms of where an SME’s liability starts and finishes. “Traditionally, for certain kinds of payments, such as online payments, the liability does rest with the merchant. For face-to-face payments which use 'chip and PIN' technology, the liability sits with the bank,” she said.

“If they’re using the bank’s technology, someone would have to log on with the SME owner’s password as well, so it’s not as simple as losing the phone and losing all the details. It is a problem if they are storing information on a sticky notepad,” she warned.

Increasing take-up

In looking at what is needed to further improve take-up of these payments systems, Bayer Rosmarin noted that while the payments options for SMEs are getting better, all technologies have transitioning times. “The market is not ready for online only, far less mobile only, payment methods – the more options the better,” she asserted.

For instance, in the growing area of online commerce, the banks are moving into providing technology to assist an SME operator set up a website, load up the shopping cart, manage the inventory – in fact everything up and including and accepting payments.

“In terms of setting up payments mechanisms and providing their SME customers with visibility over the payments that are happening, the banks can do that,” said Bayer Rosmarin.

She suggested that accountants will have a role in chasing up debtors and understanding cash flow patterns, she also noted the latter area is another service her bank is interested in.

“The accounting industry has also seen some demand from SME clients for online and mobile solutions that help with the exchange of financial data to and from their accountant. BankLink has received feedback from accountants that the online solutions should also be provided alongside existing desktop solutions so that the benefits of speed, feature rich functionality and the ability to work while offline are retained,” said Richard Reese, BankLink’s general manager operations.

“BankLink has recently delivered an online solution to its client base and will be expanding the online options it provides in 2012 where the best of desktop functionality will be combined with the benefits of online connectivity and collaboration.”

One example of the enhanced range of options is the enablement of the coding of financial transactions on a mobile device, as this is a simple activity, which is a suitable option for mobile devices.

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