How Small Businesses Can Use Fintech Companies

by Greg DePersio

2 min read

Smartphones allow consumers to conduct business with ever-increasing ease, due to the proliferation of apps and services known as financial technology, or fintech. The term “fintech” usually implies innovative financial technology because most fintech businesses take novel approaches to providing financial services. Between 2000 and 2016, approximately 100 startup businesses in Canada raised more than $1 billion in funding. Fintech companies attract enthusiastic investors, from the casual speculators at crowdfunding sites to seasoned venture capitalists. Small businesses can take advantage of fintech for a variety of uses, such as payment processing, borrowing money, and cyber security.

Small Business Software Online

Payment processing apps help small businesses conduct transactions with greater ease and confidence. The days of contacting a customer about a bounced check are over. Fintech startups are challenging traditional banks by offering simplified payment processing systems, which allow someone to operate a small business with only a smartphone or tablet. Several Canadian fintech companies offer payment processing services, allowing consumers to utilize a smartphone as a credit card or as an e–wallet.

Ottawa-based Shopify allows a small business to process credit card transactions through its own computer with a card reader. Shopify monitors cash flow by tracking sales revenue, which the Shopify app automatically transfers to QuickBooks Online accounting software. Shopify can automate small business marketing and send customised emails to customers, thanking them for their business. Toronto-based Berkeley Payment Solutions provides virtual prepaid debit cards, which have all the value and functionality of a plastic prepaid VISA card or MasterCard, although they are instantly available online via email, appearing on-screen as a typical credit card with an embossed name and card number.

Fintech Offers Small Business Financing

Small businesses face challenges obtaining loans from banks because, as most stock market investors know, investing in a smaller company involves a higher degree of risk. Fortunately, a number of internet-based startups are making loans to small businesses in a simplified manner. Toronto-based Lendified utilizes a proprietary algorithm to assess the reputation and potential of a small business to make a lending decision. Lendified’s platform allows the small business owner to apply online and get approved for a loan of up to $50,000 within five minutes. The business owner can receive the funds as early as the next business day.

Lending Loop is Canada’s first and only regulated crowdfundng platform focused on small business. It provides businesses with accessible capital at fair interest rates through a simple, online process while cutting out the costly intermediaries, such as banks. Lending Loops makes affordable financing available to small businesses in all Canadian provinces except Quebec.

Cyber Security as a Service

Ontario-based eSentire combines the efforts from a team of on-duty, cyber security analysts with the use of software for full traffic capture, log correlation, and behavior-based analytics to detect both known and unknown threats. Rather than providing a traditional, software-based cyber security program, eSentire’s managed detection and response system is a more thorough regimen, designed to protect financial service-based businesses.

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