British SMEs: The Most Technically Advanced Companies in Europe

May 30, 2023

British SMEs: The Most Technically Advanced Companies in Europe

Small and medium-sized enterprises (SMEs) in the UK have moved to contactless payments much faster than their counterparts in Europe. When we talk about the global tech hub, London immediately comes to mind. Indeed, absolute leaders in accepting contactless payments are British SMEs, with almost all of them now accepting near-field communication (NFC) cards. 

According to the research conducted by SumUp on contactless payments, here's what was found:

  • 90% of UK SMEs now accept contactless card payments.
  • 85% of SMEs in Switzerland accept such payments.
  • It’s 78% in Italy, 68% in France and 67% in Germany.
  • From 2020 to 2022, contactless payments in the UK grew by 36%, while cash ones declined by 35%.
  • Germany is the fastest to adopt NFC, with a 17% increase in 2022 alone.
  • The rate of adoption in the UK is 3%, as most already accept such payments.

Also, read the article ‘Problems Faced by Small and Medium-Sized UK Businesses”

UK SMEs and NFC-Based Contactless Cards

UK SMEs are embracing innovation. We know that the UK economic situation poses challenges for small businesses, so to hear that they are continuing to evolve in terms of technology is encouraging. The statistics show both the resilience of small businesses as they find new ways to improve and grow and the confidence in digital payments amongst users as more and more transactions are being made using contactless methods.

Customer willingness to use new payment methods is clear from the increase in both the number and volume of contactless transactions being made. Statistics collected by Barclays Bank in the UK are as follows: 

  • Over 90% of transactions that could be made via NFC were paid this way in 2022. 
  • Mobile contactless transactions jumped by 109%.
  • The total number of transactions increased by almost 50%.
  • The average payment amount was just over £15.
  • The average user of an NFC card made 220 payments in 2022, compared to 180 in 2021.

“Forward-thinking” financial service regulations were cited as the reason the UK is innovating, as per speakers at the Innovate Finance Global Summit in London. One of the main arguments for the UK government supporting innovation in the financial sector is that lawmakers have repeatedly raised the limit that people can spend using a contactless card. This has helped increase the number of users.

The reason for having a spending limit on NFC cards is that, unlike Apple Pay or Google Pay, they don’t require identity verification. Since there’s no guarantee that the card user is its owner, the government forced payment providers to enforce a payment limit to increase user security. The initial limit was only £10, but as the demand grew, it was moved to £45 in 2020 and reached £100 in 2021.

SMEs in the UK: Digitalisation Forecast

The shift to digital banking channels accelerated during the pandemic, as many bank branches and shops were closed, and people didn’t communicate with each other as much in person. And as consumers have become more digitally savvy, the number of digital-only bank offers has risen. Looking ahead, the value of UK technology could reach $2.6 trillion by 2032, based on trends over the past decade.

But there’s another side to the coin. Even though today, people are readily switching to digital technology in finance, investment alone is not yet sufficient for sustained economic success. UK businesses still have a long way to go: they need to position themselves in the labour market to ensure they benefit from this momentum. So, they’re working hard to change public perceptions, improve working conditions, and increase inclusion and diversity in terms of gender, geography, age, and demographics.

Impact on the Labour Market and Major Challenges

The growth of fintech has led to an increase in the number of jobs in this sector. Overall, the digitalisation of the economy involves adaptation, and that requires people who can help organisations from different fields, including medicine, education, and insurance, to keep up with the times. This is why there is a growing demand for IT specialists. 

And while this has a positive impact on the labour market, there is a growing disparity between wages in the technology and non-technology sectors. What’s more, diversity and inclusion in the technology industry have made almost no progress over the past few years, which raises concerns about potential polarisation.

To overcome these challenges, the well-known motto, “equal opportunities for all”, should turn from just a phrase into a must. It should be emphasised so that companies take measures to prevent further inequalities. The tech economy offers a range of tech and non-tech roles, creating many new opportunities for work. And even when one part outweighs the other, there still has to be a balance in terms of payments and benefits.

Fintech is a major driver in the UK technology sector, accounting for 41% of company value in 2021. However, as calculated by KPMG, total investment in UK fintech declined from $39.1 billion in 2021 to $17.4 billion in 2022. To continue to grow, areas such as health technology, climate technology, energy technology and deep technology need to be the centre of attention.

Deep Tech and Impact Tech Sectors

The UK has made remarkable strides in deep technology investment, with funding increasing to more than $8.5 billion in 2021; however, there is still huge untapped potential. The term “deep technologies” refers to technologies based on tangible engineering innovations or scientific advances. The focus is on finding new solutions to climate change, clean energy, and food production for a growing global population. Deep technologies include:

  • Artificial intelligence 
  • Machine learning
  • Language processing
  • Big data
  • Robotics
  • Blockchain

A combination of targeted innovation and deep tech development is critical both to addressing environmental challenges and maintaining the UK’s reputation as an innovative hub.

Another area that needs attention is the impact technology sector. In this term, impact stands for a change in an important positive or negative outcome for people or the planet. Over the past 10 years, this sector has experienced substantial growth, but it still needs support to continue the current uptrend. 

In 2021, funding for impact tech start-ups was 9% of total venture capital funding, overtaking the fintech sector. Much of this funding came as investments in climate-focused Net Zero tech companies. The future growth and success of the impact sector could be challenging due to the decline in funding for early-stage start-ups. It’s likely that they will receive more capital support in the upcoming years, as this sphere influences both the UK economy and the whole world.

Payrow and Technological Advances

Payrow is proud to be one of the UK’s fintech companies dedicated to driving the growth of UK businesses. Our company specialises in providing services and innovative solutions that enable new start-ups, small and medium-sized enterprises, and online firms to integrate up-to-date financial products into their business processes. 

We want to increase the adoption of fintech by introducing the latest technologies that make finance more accessible. You can improve your business strategy, reduce costs, and automate routine processes. If you want to free up your time and focus on the core of your business, Payrow’s services are just for you. We offer professional customer support at every stage of the business cycle. Start your business with Payrow. 

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