The pace of technology is overwhelming and it has transformed the way we send and receive money. Small businesses stand to benefit more from this private and public sector anchored innovative payment techniques. In five years, the five payments tend mentioned below will open doors of opportunities to small businesses.

1 - Cash and check payments will phase out

The paper-based payment system is declining steadily made evident in the 2016 Report on Canadian Payment Methods and Trends. The report showed a decline in paper-based payment from 5.8 percent in 2011 to 4.2 percent in 2015 – with projections of falling further. The use of check is favored by small business because it is easy to track and annotate. The new electronic payment system – particularly ISO 20022 – will take care of this according to recently published white paper. This electronic payment system allows descriptions to be automatically embedded into the electronic payment messages.

2 - Customer-grade payment experience is at sight

The majority of innovative payment system occurred in retail banking – from the blockchain-based transfer of funds at a low cost to getting instant loan approval. Small businesses have been left out in all these innovations. Canadian payment team leader, Soumak Chatterjee says, “They”, small businesses, “see all this cool innovation happening on the retail side but they don’t see it happening on the commercial side”. This gap is expected to become dimmer in a few years.

3 - Real-time payment system will upset the old norm

There has never been a time in history when payment method has been real-time. This is changing. The UK has already implemented a faster payment system. Australia is on the verge of it too with its New Payment Platform. That of Canada will happen in a few years, giving businesses more information than is already available. This will further close the innovation gap between small businesses experience with consumers.

4 - Better banking experience

You have to log into your bank’s platform to carry out any transaction. Chatterjee says this would change, “it’s about how you open up access to data and payment capabilities from current providers”. In a few years’ time, banking interface will be more open, he says. This will be possible through application programmable interfaces (APIs).

5 - The importance of Analytics will grow

Small businesses will have increased access to analytics because of increase in payment data. Small businesses will make a better decision as a result of the combination of reduced cost of analytics software and machine learning technology.

These trends will occur, but gradually. Its development will depend on risk tolerance assessment on the part of the financial institution and how receptive small businesses are to them.