Bus i ne s s & Economy Finance Monthly. 22 a Single European Payments Area (SEPA) – whereby customers can make cashless payments via credit transfer and direct debit anywhere in the EU and in many non-EU countries, including the UK. Here, using alternative payment systems designed to be compatible with widely used payment methods, like PayPal, improve interoperability and alleviate some of these issues. Facilitating SME growth Small and medium enterprises (SMEs) are as central to economic growth and employment as they are to innovation. Access to more traditional online payments can be difficult for unproven enterprises, so alternative payment systems have emerged as the solution for many. In providing a single easy payment mechanism, merchants can circumvent banks and card companies and instead engage with a single service provider and ensure customers can have their preferred payment method – whether a debit or credit card, bank account or other. According to the European Commission’s Annual Report on European SMEs 2021/22, SMEs constituted about 99.8% of all European enterprises and contributed about 65% of overall employment, highlighting their economic importance. Alternative online payments support the growth and further expansion of SMEs online, enabling them to enter new and emerging markets by harnessing online trade – and supporting the domestic economy. Without access to alternative payment methods, many SMEs would be without the support to trade globally. Artificial intelligence (AI) and Software-as-a-service (SaaS) expansion AI has supported many enterprises’ efforts to bring in new revenue streams. Now, digital payment systems are increasingly looking to harness its possibilities. It can be applied to help with data storage capabilities, predictive models, and user experience and empowerment. It can also support compliance, fraud detection, and cybersecurity. To protect a user’s financial security, AI-powered algorithms can analyse payments and transactions, gather data from different online payments and transactions, learn the patterns from former fraud cases, and determine a pass or fail verdict in near real-time. AI minimises fraud for complex, high-volume transactions and human error in flagging suspicious transactions and will significantly impact the overall fraud resistance of digital payment systems. It can also be used by businesses to determine how best to pay suppliers or enhance customer service and expandmarket research. With a talent shortage and a limited pool of graduates with specialist data skills impacting the ability of businesses to see through their digital transformation projects – AI can help here too. Taking on repetitive and time-consuming tasks so employees are free to handle more complex tasks where a human touch is needed. Steered by the talent and skills conundrum, SaaS is of growing relevance for many businesses. 2.14 B “In 2021 people – almost a third of the world’s population – bought goods and services online.” 74% “In the European Union (EU), of internet users had shopped online.”
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