It has never been easier for business owners to get rich than in 2020 and beyond. Think about it: An entrepreneur with a solid business idea has immediate access to selling their products or service to anyone in the world. Behind the scenes, there are dozens of financial services for businesses that make this task easier and more profitable.

History of Technology Innovation

It wasn’t too long-ago business owners lived and died through the banks. Checks could only be cashed at tellers during certain hours, appointments to see advisors were set weeks away, and transacting business 24/7 online was a distant reality.

Today, smartphone apps make all this and much more possible.

The advancement of modern financial services for businesses was born in the late 2000s in the wake of the global financial crisis. Banks suffered a giant hit to their reputation and new start-ups were eager to fill the void. 

The concept of financial services startups built specifically to help small businesses succeed replaced the prior status quo of mega Wall Street banks not caring about their small business customers.

Here are a few samples on how financial services for businesses use cutting edge technology to better help small businesses compete and save money.

A Simple Idea Leads To A New Industry

Consider as an example the online money transfer service company TransferWise. The idea of how individuals and businesses can more efficiently transfer money across the world for a cheaper cost was born at a party in London. 

Transferwise’s co-founder Kristo Kaarmann was working in London and was paid in pounds but needed euros to pay a mortgage in his native Estonia. The other co-founder, Taavet Hinrikus, was working in London and was paid in euros but needed to transfer money to pounds so he could live his daily life.

The two started to informally transfer money between themselves at a rate that was much more favorable compared to traditional banks. The concept led the two to start a global money transfer service that now helps millions of customers save money through a proprietary technology infrastructure.

Banks could have easily come up with this technology on their own years ago but there was no incentive to do so. They were quite content with overcharging small business owners through a commission on the exchange rate and undisclosed fees.

One Fintech Company Can Satisfy Many Needs

One of the more prevalent themes playing out in the financial services is companies wanting to gain a bigger share of their wallet by offering ancillary services. The new one-stop-shop for all a small business needs is now possible thanks to the advancement of technology.

Consider as an example, Square. The fintech startup’s root traces to selling a hardware credit card swiper that attaches to a smartphone or tablet. Thanks to the advancement of this new technology, any business owner of any size can handle credit card transactions.

Fast forward a few years and now Square doubles as a loan provider, payroll facilitator, inventory management services, and much more.

Square and other similar companies are looking to take market share from the estimated $5,438.8 billion market that is expected to grow to $8,059.3 billion through 2023.

Other companies looking to flex their technology muscles and provide financial services to small businesses include Apple Pay. The iPhone maker is betting big on its Services business and strives to create a transaction that is faster compared to traditional credit and debit card transactions.

Future Of Payments Saves Everyone Money

Small businesses should be the loudest and most vocal supporters of a switch to mobile payment apps. See, for each $100 a consumer spends on a credit card, the merchant receives around $97.25. The remainder is split between the issuing bank, the payment processor, the merchant’s bank, and the card network.

While it may not seem like a large amount, multiple $2.75 by dozens if not hundreds of transactions each day. Over many years it adds up to a lot of money that should be in a small business owner’s account.

If the adoption rate for mobile payment apps rises to levels in China, banks would lose out on $43 billion in revenue from what is considered one of their most profitable businesses. That money won’t just disappear, rather it will result in both business owners and consumers having more cash in their hands and out of the hands of the banks.

Conclusion: Embrace Technology Advances

Anyone who assumes the era of technological advances, especially in financial service providers, has come to an end are wrong. Peter Diamandis, widely considered one of the leading futurists, said the following:

“In the next 10 years, we’re going to reinvent every industry on this planet, but the change is one that is for the benefit of masses, whether it’s in longevity or food or banking.”

In fact, the next 10 years will see more technological advancements than in the past 100 years combined. Encouragingly, there is enough investor capital and interest to ensure every technological advancement is brought to the market. 

Business owners are encouraged to stay up to date on all the new technological advancements and understand how it can improve their business and provide a better experience to customers.