Marketplaces and payment providers unite for the sake of small business
I’m going to start this newsletter with a bold assertion that when you bring together the UK’s major marketplaces (eBay, Etsy, TEMU, Fruugo etc) with leading payment providers (Stripe, PayPal, Square), you have in one room a group that reaches most small businesses in the UK. This is why we were delighted that Minister McDougall did welcome these partners into a room this week to discuss how we build on the Marketplace guide published last year and go further to ensure small businesses are feeling fit for the future.
Here are the key items discussed:
Reducing burden
The current government has an ambition to reduce the admin and regulation burden on small business by 25%, quantified as an annual saving of 200 hours spent on non-productive work. Show me a founder who doesn’t want to free up 200 hours to spend on more meaningful work? Marketplaces play a significant role in this through taking on some of the admin chores with which a trading small business needs to comply, with the main one being VAT collection. We’re now looking at whether this can be quantified and what more could be done to help reduce business burdens.
Speeding up finance
Through access to live performance data, platforms can identify merchants using their products who would qualify for a loan. Access to lending is achieved in a ‘few clicks’ and money can be in the account of a small business the next day. If Carlsberg made lending, it would look like this! ie small businesses being informed they are lend-worthy and then the loan being repaid through future sales where the more you sell, the more you pay back. Examples were offered of retailers and hospitality operators being able to make the most of expansion opportunities through such rapid access to growth capital. It will be interesting to see if lessons from this could be applied across the wider lending sector.
Routes to trade
Marketplaces and payment providers enable international trade, with one platform stating that 9 out of 10 businesses trading with them sell to the world. Some referenced a successful partnership with delivery firms that enabled sellers to print out postage labels that have international charges included, and others are working on seller dashboards to offer forecasting on sales volumes to support founders with inventory planning. How to navigate the changes to de minimus (small value trades) for both platforms and small business was also discussed.
Digital confidence
Most attendees are running education programmes for their respective communities to support with digital adoption, with one platform offering free AI subscriptions to 10,000 businesses, along with associated training. All attendees agreed that if small firms feel digitally capable and confident, this has a positive impact, and industry has a role to play in continuing to ensure their products have in-built AI, are simple to use, and are boosting digital capability amongst their user base. The introduction of e-invoicing was welcomed in view of its likelihood in accelerating the uptake of digital tools.
Fit for the future
One issue that emerged was the need for small firms to continue to be ‘discovered’ as consumers shift shopping habits to have AI agents shop on their behalf; for both product and services. It was agreed we will take next steps to convene a larger group to discuss a national effort to deliver education and support for small businesses on how to be ready for and make the most of agentic commerce.
Thank you to the Minister for hosting, to attendees, and those who could not make it but remain supporters (here’s looking at you Tesco, OnBuy, B&Q, SumUp). Now we get to work on follow-up and making the most of what is a powerful coalition that is well placed to positively affect small business trade and confidence.