Why on demand settlement is crucial to business survival
Demand for faster payments is nothing new. Ever since currency began to change hands over a millennium ago, consumers and merchants have sought faster, more convenient ways to move money.
Despite many innovations and improvements to faster payments over the years 2020 highlighted that more needs to be done to support businesses. Plummeting economic activity meant that for many UK companies, cash flow came under severe pressure. The Bank of England estimated that in order to maintain employment, buildings and equipment throughout the pandemic, British companies could face a total cash-flow deficit of £140 billion. That is a truly frightening number.
The accelerated migration to e-commerce this year has also created a new challenge. With so many people unable to visit the high-street, e-commerce grew by 34.7% in just one year, with more than £141.33 billion spent online. Digital payment methods may have opened vast new opportunities for businesses, but they have not helped with faster settlement. In many ways, the rapid rise of e-commerce, coupled with the waning of cash purchases, has diminished businesses’ ability to access their own funds quickly, when they need it.
In our faster payments white paper we look further at how business cash flow has been impacted and how technology could provide the solution
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