TRENDS AND INSIGHTS Simplify to Grow: The SMB Advantage

Owning and running a small business is the dream of millions of entrepreneurs around the world, from a street vendor in Jakarta to a tech start-up in San Francisco. However, a significant number of SMBs don’t succeed - in fact Forbes reported that one in five businesses fail within the first year¹. 

OECD analysis shows that small businesses don’t fail for lack of ambition. A key reason is when operational and administrative complexity consume the owner’s limited time and capacity². A report from the UK government found a similar trend, with their data showing that many small businesses remain in operational mode, with limited time or resource to invest in systems that enable growth³.

So, what support can be provided to help these businesses that are so central to the UK and wider European economy, representing 99% of all businesses; 63% of all employment; and 49% of all business turnover⁴? The answers are nuanced and can be complicated, based on market factors. But a key baseline of business management, whatever the size, is the impact of digitisation, which democratises access to tools and capabilities that were once available only to the largest organisations.

A report⁵ from Visa last year captured detailed insights from thousands of SMBs across Europe to understand how they are paying, getting paid and operating generally. The headline was that SMBs are digitising, with key trends driving this shift including the growing adoption of digital payment methods and the increasing demand for integrated, seamless solutions.

The report found that the way SMBs manage money today is being shaped by three trends: 

1. Digital Tools - CRM systems to boost sales and CX; accounting tools to support financial management; and ecommerce capabilities within their websites to generate business opportunities.

2. Embedded solutions - tools that do it all within their existing ecosystem, meaning customers don’t have to leave their platform to pay. In Europe, we’re embedding our issuers’ virtual card credentials in ERPs and accounting software providers for SMBs. We’re also investing in corporate activation, to help our banks with implementation, sales and marketing support, to light up these programs.

3. Regulation, including e-invoicing and Making Tax Digital – by 2030, structured e-invoicing will be mandatory for intra-EU B2B transactions under ViDA, with many markets moving sooner⁶. Yet 30% of SMBs who send invoices don’t know about this or aren’t sure it applies to them⁷.

These trends showcased the opportunities and challenges that paved the way towards digitisation and a more seamless user experience for business owners and their leadership teams. 

Realising the value of ‘pay’ and ‘be paid’

Digital-first experiences allow businesses to pay and manage their finances seamlessly from anywhere, at any time. By delivering an intuitive digital and mobile user experience, enabling wallet integration, and offering virtual cards, payment providers can significantly improve user convenience and satisfaction.

Visa Commercial Solutions (VCS) enables SMBs to digitise accounts payable, helping them pay vendors and suppliers using commercial cards and virtual payment credentials. These tools support a wide range of business purchases and services, offering greater flexibility while helping businesses extend payment cycles and improve working capital management⁸.

Through commercial card solutions - including credit, debit, prepaid and virtual cards - SMBs can separate business and personal expenses, set spending controls, and gain clearer visibility into outgoing payments. This helps reduce administrative burden, improve financial discipline, and support faster, more confident decision making.

VCS integrates payment capabilities with spend and expense management and reporting tools, allowing SMBs to track, monitor and reconcile spend more easily. By digitising transaction data and reducing reliance on manual reconciliation, businesses can save time, improve accuracy, and gain better insight into where and how money is being spent⁹. 

SMBs need payment tools that work as simply as the consumer apps they use every day

Digital tools allow SMBs to reach global customers, accept digital payments and manage cross border expenses with the same ease as local transactions. They help SMBs and governments unlock economic opportunity by accelerating the shift to secure and data-rich digital payments.

Cards are increasingly a core part of the SMB payment mix, with 60% of European SMBs accepting card (including via a digital wallet) directly in 2025, up from 55% in 2020¹⁰. Digital wallet acceptance significantly increased to 25% in 2025, up from 17% in 2023. And digital payment schemes are gaining popularity in relevant markets, for example local instant payments systems in Spain, Poland, Portugal and the Nordics have all seen high growth.

Other digital payments tools are flourishing, with real commercial benefits. For example, ‘Tap to Phone’, which transforms an NFC smartphone into a secure, contactless POS, grew 200% year-over‑year worldwide in 2025, with nearly 30% of Tap sellers being new small businesses. In the U.S., UK and Brazil, growth hit 234% combined, a leveller for micro-sellers and popups that need to take payments immediately and affordably¹¹. 

Next Gen SMBs are shifting from exploring digital to embracing digital

A separate report from Visa¹² looking at the next generation of SMB owners and younger entrepreneurs found some promising trends in embracing the benefits of digital commerce. It showed that Gen Z and Millennial business owners are digital-first, socially conscious, and expect seamless experiences. They’re not just looking for payment solutions; they want tools that help them manage cash flow, grow online, and connect with customers globally. In short, they’re building businesses for a world that moves at the speed of tech.

The study revealed that while these next-gen leaders are ambitious and tech-savvy, they face real challenges: rising costs, access to capital, and navigating complex regulations. They’re hungry for simplicity and value - solutions that save time and reduce friction. They also care deeply about sustainability and inclusivity, which influences everything from their supply chains to their brand voice.

Agentic AI is another area that can help SMB owners. Just as mobile reshaped our daily experiences, agentic AI can help businesses plan, decide and act, taking this friction out of their lives and giving them time to focus on what’s important. Agentic AI is already powering how our clients work. From chatbots answering questions, to AI tools selecting suppliers, predicting demand, managing payrolls and identifying potential fraud – it’s at the forefront of today’s business operations. 

All this isn’t just a generational shift; it’s a business revolution. The expectations of next-gen SMBs are setting the tone for the future of commerce that’s underpinned by payments innovation. Understanding their priorities means creating experiences that go beyond transactions, helping them thrive in a competitive, connected world. For platforms serving these businesses, such as fintechs, FIs and service providers, this is the moment to innovate and build relationships that last.

Powering the future of commerce through smarter, faster, safer payments innovation 

SMBs face a complex operating environment. From new e-invoicing mandates and regulation to intensifying competition and economic uncertainty – it’s a tough environment to create, build and scale a business. Addressing these barriers could unlock the full potential of digital solutions for SMBs. 

Such solutions help SMBs sell to customers anywhere, manage their cash flow, streamline day-to-day tasks and participate more fully in today’s global economy.  SMB owners are realising the benefits of managing expenses and leveraging credit to meet their working capital needs. They appreciate the ease of flexible credentials, the seamless nature of virtual cards and wallets and the support of a digital CFO to ease the burden of financial admin. 

Visa enables growth by letting merchants and clients focus on their core business, delivering tools that help small businesses stay resilient, responsive and ready to scale. We embrace an open ecosystem approach to innovation and are a payments hyper-scaler  to serve and help others to build, launch and scale businesses across the region and across the globe. 

When SMBs thrive, communities and countries do too.