Pollinate: The Payments Industry Cannot Be Complacent About Supporting Small Businesses

The COVID-19 pandemic has impacted all businesses, but the smaller firms have been particularly hard-hit. Jonathan Hughes, co-founder of Pollinate and CEO of Pollinate Horizons, shares his thoughts on why, and how, the payments industry must support the small businesses coming out of the crisis. “The new technologies and payments rails that connect consumers and merchants provide a unique opportunity to transform the prospects for small businesses everywhere, but also present huge challenges that we must lean into, not shrink from,” notes Hughes in “A Look Forward: What Executives Wish for America and the World in 2021.

The COVID-19 pandemic of 2020 has required the world’s governments to make some incredibly difficult trade-offs, including weighing preserving public health, personal liberties and the ability for people to earn a living and run their businesses. Unsurprisingly, most of the world has prioritized public health. However, as we look forward to more effective vaccines becoming available in 2021, we must seek to rebalance this, and help individuals and small businesses get their finances back on a sound footing.

Pandemic or not, payments provide the lifeblood of small businesses. The good news is that throughout 2020, the payments industry has been rapidly innovating and seeking to simplify and automate processes for merchants and consumers alike. But we could be doing more. As an industry, we, together with our regulators, have a duty to ensure that every business can be paid by its customers in an efficient, safe, risk-free and economical way. This is even more important as we support businesses coming out of the crisis. The payments industry has always excelled at efficiency, as is evident in the myriad FinTechs and banks that are constantly pushing to reduce friction end to end for their customers and partners. And from a safety angle, we’ve seen COVID-19 act as a catalyst for many merchants to start accepting card payments, and particularly to embrace contactless as a method of reducing the risk of passing infection between staff and customers.

Fraud and security issues are significant problems faced by all businesses, but small businesses often have fewer resources to recover. In the wake of the pandemic, many were forced to digitize — perhaps before they were ready — and will continue to have very valid concerns around how to protect themselves from the risk of fraud.

Finally, a challenge to the industry — in an environment that is increasingly complex — is how to make payments simpler and more cost-effective for small businesses as they look to rebalance their books. In the U.K., many banks, including NatWest, waived fees for a period of time to help their merchant partners alleviate financial strain. There is an argument for our industry to reconsider how to become fairer and more transparent around charging fees to entrepreneurs and merchants, as we collectively look to boost economies around the world and encourage more small businesses. The payments industry has been able to support many businesses and enable them to continue running throughout the pandemic, but we cannot be complacent.

We should continue to find new ways to help small businesses weather the storm and thrive in 2021. The new technologies and payments rails that connect consumers and merchants provide a unique opportunity to transform the prospects for small businesses everywhere, but also present huge challenges that we must lean into, not shrink from.