Evolving Habits In Businesses, Banks, And Bills

In this week’s Data Digest, we take a trip around the world to uncover the evolving habits of business payments and cash management. From a heightened use of mobile banking solutions, to more evidence of paper check abandonment, to the potential fiscal impact of the blockchain for banks, this week’s data was all about FIs and their corporate clients shaping the way money moves between firms. We break down all the numbers below.

$1 trillion has passed through Citi’s mobile banking solutions for corporates, the bank announced last week, hitting a milestone since CitiDirect BE Mobile launched in 2011. The tablet version of the corporate banking tool was launched soon thereafter. Hitting the milestone, Citi’s Treasury and Trade Solutions said, means businesses’ banking needs are evolving. Surprised? Don’t be. Separate reports published last week covered several banking executives that pinpoint corporate clients as helping drive virtual banking adoption.

$18.5 billion worth of late payments plagues Australian SMEs, making it clear that the late supplier payment problem isn’t just an issue in the U.K. That’s according to a new startup called DragonBill, created to combat late payment problems that can weigh especially heavy on the smallest of enterprises. According to the company, the average SME in Australia is owed more than $7,000 in overdue payments from their corporate buyers, with business owners spending an average of 83 hours every year chasing down outstanding bills.

53 percent of SMEs say now is the best time to be a small business owner, found recently released research by Allstate and USA Today. Their small business barometer concluded that small business optimism in the U.S. is strong, with the majority citing new technologies, an improving economy and favorable lending conditions as factoring into why they believe today is a great time to be in their position. Reports note, however, that the survey was conducted last November, before stock market swings.

42 percent in cost-savings could potentially hit banks if they adopt Ripple’s distributed ledger network and XRP digital currency to fulfill cross-border payments for their clients, according to Ripple. The company released a paper last week outlining the fiscal benefits to banks of adopting its network; in it, the company pointed to banks being able to allocate less liquidity, minimize the number of intermediaries involved in a transaction and allow banks to hold all of their global payments in XRP, in a single account. The cost savings surely are a win, but it’s another story as to whether banks will eventually adopt blockchain technology on a mainstream scale.

25 percent of the funding needs among India’s SMEs has been met by banks, as of last March, estimated global analytics company CRISIL. That means a “substantial portion” of the nation’s 50 million micro, small and medium-sized enterprises aren’t getting the working capital they need from financial institutions. Researchers pointed to the perception of higher risk among these borrowers as one factor playing into the gap of small business lending. The problem is exacerbated, analysts added, by slowing export demand, a declining euro valuation and a steep drop in commodity prices.

9 percent of suppliers want to get paid via commercial card, says new research from Receivable Savvy. But that doesn’t mean suppliers aren’t interested in electronic payments. In fact, 63 percent said they prefer electronic payments, especially ACH, while just one-quarter want to get paid by paper checks. It may come as no surprise that suppliers don’t want to get paid via commercial card considering the interchange fees associated with the product. Even so, more than half of suppliers reported getting paid via commercial card from their buyers, despite their preference not to.

6 paper checks per capita are written yearly by businesses, according to the head of the payments policy department at the Reserve Bank of Australia, Tony Richards. That statistic represents acceleration of the rate at which corporations are turning away from physical checks to pay their bills. According to the official, business use of checks is declining at a rate of 16 percent a year — up from 13.5 percent between 2010 and 2015 and from 10 percent between 2005 and 2010. In the mid-1990s, Richards added, Australian businesses wrote an average of about 50 checks per capita every year.