At a recent discussion on how digital innovation is transforming SMEs hosted by Nedbank, it was clear that South Africa’s SMEs are alive to the possibilities that digital technologies offer them.
According to Ciko Thomas, Group Managing Executive: Nedbank Retail and Business Banking, this view is backed by research undertaken by Xero. ‘The global small business platform suggests that South Africa’s small businesses are gearing up for growth. Xero’s research shows that 34% of SMEs are preparing to expand into new markets and 85% are investing boosting investment in technology and cloud skills,’ says Thomas.
‘At Nedbank, we passionately believe that SMEs are crucial to our country’s economic future. We’ve put a lot of thought into developing digital solutions that make it easier for them to access banking innovations that save time and allow them to develop new revenue streams,’ he says. ‘We also recognise that bankers have to align themselves with their customers and provide more than just financial services.’
Nedbank means business
Nedbank developed a comprehensive digital offering targeted specifically at SMEs. It’s a given that SMEs can open accounts online or via the Nedbank Money app, but the bank offers a start-up bundle with free banking for six months, plus a dedicated banker, for SMEs with a turnover of less than R3 million. SMEs can also access finance online, be it an overdraft facility, vehicle or asset finance, or a term loan.
‘Access to finance is one of the big success levers for a small business wanting to become a bigger one—we are making it easy for SMEs to overcome this barrier,” Thomas says. “Of course, all the normal banking functions are also available online or via the Money app, saving hard-pressed SME owners valuable time’.
Another area of focus is to make it easier for SMEs to accept payments digitally. South Africa has a strong cash economy, and many SMEs are largely reliant on cash. But, Thomas explains, digital payments can be much more convenient and also reduces the risk of holding cash in a country where crime is rife.
Digital payments also automatically generate a record that SMEs can use to access finance.
The hallmark of digital payments is innovation, and there is a growing range of solutions that open up new opportunities for smaller businesses. Nedbank was first to market with its Tap on Phone solution, enabling merchants to accept card payments directly with their own smartphones—no need for expensive point-of-sale devices.
Then there’s the ability to pay and get paid via WhatsApp, South Africa’s digital communication platform of choice, via Nedbank Money Message.
‘QR codes are also coming into their own as a way to facilitate swift and easy payment, without the merchant having to have a dedicated device, electricity or even connection to the internet,’ Thomas adds. ‘By simply displaying a Masterpass QR code, the SME can accept payments via the customer’s phone.’
Going well beyond the remit of a traditional bank, Nedbank has also developed a range of services that provide even more support to SMEs. These include learning opportunities and coaching, as well as innovative marketplaces where SMEs can get discounts on business supplies, market their services, and even participate in an expanding digital marketplace, Avo. Avo is Nedbank’s super app, providing a single platform on which users can access a wide range of products and services—it now has 1.7m customers and 24 000 merchants.
‘Avo is truly a great way for an SME to access a massive customer pool instantly and is helping many SMEs leverage digital technologies to do business more smartly,’ he concludes.
