The Green Sheet Online Edition
January 1, 2025 • 25:01:02
A voice from the UK: The SME outlook for 2025
We were assured 2024 was going to be the Year of the SME. Did it feel that way? We had a budget that was lackluster at best and actively hostile to small businesses at worst. Inflation remained high, and ordinary people, whose spending is the lifeblood of small and midsize enterprises (SMEs), were cautious about the economy.
SMEs and the companies that work with them must advocate for themselves and build systems that can turn their fortunes around in 2025. Payments systems can help SMEs keep more of each transaction and offer far more options for consumers. The ability to offer financing on orders would be huge for many SMEs; it could start the recovery process for them.
The AI backlash begins (kind of)
AI has been the overwhelming press story in recent years. Companies like Kraft Heinz, Coca Cola and McDonalds began using generative AI, with mixed results. The initial excitement has largely died down. More people are asking what AI can really do. The term "AI slop" has become shorthand for the surreal, disturbing images and videos flooding social media.
So, is there going to be an AI backlash? Not exactly. AI is used every time you make a payment, see an online ad or talk to a smart speaker. It is absolutely a part of our lives and a part of the payments ecosystem. However, generative AI has limited applications and few paths to profitability. Is AI here to stay? Absolutely. Will there be exciting, surprising and controversial developments in the near future? Definitely. But its groundbreaking, world changing development is yet to come.
Open banking
While open banking has been on the forefront of fintech conversation since 2018, it hasn't been as successful as its creators would have hoped. Many people either haven't heard the term or have negative perceptions of it. But many people are using it without even knowing. Open banking is in fact quite popular so long as you don't call it open banking.
While there is an appetite for the things that open banking can do, there is little appetite for the term itself. What does this mean for the fintech industry? It means that the general public don't always get excited about the things we get excited about, and that's okay.
They don't need to know the app they use to apply for credit or manage their finances is part of a larger ecosystem of services created by the Payment Services Directive 2 regulatory framework. And we as an industry don't need to promote open banking as a concept, or even talk about it, when we can promote the individual services that open banking enables.
We are not the USA
The U.S. election has generated its share of headlines and analysis, and the fintech industry has joined the hype train.
Frankly, ideas we're seeing from the United States right now will likely be watered down before they come into contact with reality: tariffs that would vastly increase consumer prices, a radically reduced federal government that would leave millions of workers jobless, and constant references to trendy topics like AI and cryptocurrency that may have little to no real world implications.
What does this mean for us on this side of the Atlantic? Honestly, not much. Despite Brexit, the UK is always much closer to Europe in regulatory terms, so a flurry of red tape cutting in the United States isn't going to affect our own legislation. The UK's economy is interlinked heavily with the U.S. economy. That's true. But not to the extent that major up- or downswings will move our own economy too much.
It's natural to be concerned about what a geopolitical six-hundred-pound gorilla like the United States is doing, but we should be sober-minded about the level to which our economies are really intertwined. It's likely whatever happens there isn't going to mean the end of the world.
In this environment the UK's SMEs need all the help they can get, and that starts with a payments system customized to their needs. This is the crucial role that our industry plays. We need to do more than ever to equip businesses to ensure 2025 is the best year yet. 
Scott Dawson, head of sales and strategic partnerships at DECTA, is a highly motivated and results oriented individual with 20 years of experience within the payments industry. Previously, he served as commercial director at Neopay. He has also held fraud management positions at PSI Holdings and Neteller, before becoming senior fraud manager and then business development manager at ClickandBuy, which was acquired by Deutsche Telekom. DECTA provides end-to-end payment infrastructure, from acquiring to issuing and processing, but unlike other players in the crowded payments marketplace the company offers bespoke-as-standard solutions aimed at making payments accessible to everyone. Contact Scott via LinkedIn at linkedin.com/in/scott-dawson-uk.
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