January 27, 2020
UK SMEs are facing a serious digital dilemma, with three in five operating their business without a high speed internet connection. This finding, from Bionic’s Business Efficiency Index (registration), is part of an overall picture of the UK’s small business community struggling to keep pace with tech acceleration; small minorities have modern payment methods or access to e-commerce channels. 57 percent of SMEs do not have high-speed internet, and under one in ten businesses (9 percent) plan to invest in access in the near future.
In turn, slow or unreliable access inhibits SMEs’ ability to access e-commerce channels or advertise online to new or returning customers. Bionic claimsthat just 20 per cent of UK SMEs are currently selling products or services online and just 4 percent plan to explore a digital channel in the near future.
SMEs’ approach to their payments systems also appears to be rooted in the analogue age. Only one in five has a mobile card reader to process customers’ card payments. As the number of contactless card transactions continues to rise sharply – there were 1.5 billion transactions on UK cardholders’ debit cards in August 2019, a 9.3 per cent rise year on year. Only 20 percent of spending in the UK is now paid for using cash, yet nearly 4.5m of the UK’s 5.8m SMEs are unable to process contactless and digital card payments.
A lack of engagement with telecoms is a driver of UK SMEs’ ‘digital lag’. Nearly two thirds (61 percent) of SMEs have not reviewed their current business telecoms contracts in the past year and more than one third (38 percent) have not reviewed over the past three, missing out on faster connection, access to new products, not to mention potential costs savings.
Commenting on the research, Paul Galligan, CEO of Bionic, said: “Up and down the country, the majority of SMEs are yet to harness the power of technology to turbocharge their business. We live in an internet age, but the backbone of the UK economy is still being supported by copper connections and cash – rather than fibre and contactless. The upside is that UK SMEs have a huge amount of open road to run into and can access a digital dividend by making small change.”
Image by stux