A new report, the first by a UK fintech to show detailed spending habits of more than 133,000 UK small businesses and more than £32bn spending, has been launched. “The Battle for Business Wallets” is a global review of £126bn worth of spending by over 250,000 SMEs in the UK, US, France, Canada and Australia in the past decade. It reveals how digital challengers are winning round small business customers, with British SMEs more inclined to spend on companies providing bespoke, tech-focused services.
By analysing 54.7m transactions in the UK alone in 2019, the data also shows how events such as Brexit negotiations and elections impacted SME spending, reflecting the volatility within politics and the general economy in 2019.
Key findings from the report, which analysed spending patterns from hundreds of thousands of SME customers include:
• Small British businesses are now spending over £23,000 annually on digital services from Facebook, Google and LinkedIn
• British SMEs who rent WeWork office space have doubled their spend at the company in the past 4 years, registering (£56,055) with WeWork in 2019
• Growth in SME transactions with challenger Metrobank has outpaced that of its established high street competitors, with Revolut’s growth higher than Lloyds, Natwest and HSBC.
• Small businesses are registering thousands of pounds of spend (£2,469 in 2019) with Amazon.
• Tesco owned Booker bests its rival Bestbuy with more than five times the volume of transactions recorded through Receipt Bank.
Despite an eventful year for British SMEs, they are still one of the highest spenders compared to their counterparts around the world, with an average annual spend per SME of almost a quarter of a million pounds.
Additional analysis by Receipt Bank shows how events such as Brexit negotiations and general elections made for a volatile year for SMEs. For example, SME spending per transaction hit an all-time low in August 2019 at £624.86 before rallying in October 2019, just ahead of the general election.
Adrian Blair, CEO of Receipt Bank, commented: “Small British businesses are processing tens of billions of pounds of spending through Receipt Bank each year, giving us a good sense of how they are faring in the economy and confidence in their future. We are uniquely placed to give visibility on line item spend data – which will become increasingly useful to SMEs as they digitise their operations. “We produced this report to give British SMEs greater visibility over where businesses like theirs are spending their money. Clear insight into spending and finances is something small British businesses are only getting with companies that have digital services at their heart. The fast growth of providers like Metrobank, Revolut, who have led the digital frontier in their sectors, is testament to this.
“SMEs want faster, effective and predominantly digital services, making their lives easier and helping them get on with their day to day activities. They should be provided with the latest tech, so that way they can manage their finances better, particularly at times of economic volatility, as we saw occur in 2019.”