Xero has announced a partnership with Macquarie Bank's DEFT payments system and integrated EFTPOS provider Tyro that will see the cloud accounting firm integrate with electronic bill payment system BPAY.
Making the announcement at Xerocon South in Brisbane, Trent Innes, managing director for Xero Australia, said the BPAY integration will be launched initially with DEFT to bill customers and with Tyro to pay suppliers.
Over time, Innes said Xero's platform will also allow small businesses to choose from a range of providers to receive and send payments through BPAY's payment service.
"BPAY is a standardised platform -- everyone knows it and understands it -- so we're building it in-app to make it as easy as possible for small businesses to make payments with BPAY or receive payments via BPAY directly out of the app," he said.
"We're trying to make things as easy as possible for small businesses."
Innes said that the integration came from a request by Xero users, with the New Zealand-based company now ticking the long-demanded feature off its to-do list.
Still tight-lipped on the specifics of what that means for Xero users, the BPAY integration should be live by the end of the year, Innes said.
According to Innes, 49 percent of small businesses in Australia shut up shop within a five-year time frame; when it comes to small businesses that use Xero, Innes said only 12 percent disappear.
When trying to understand these statistics, Innes said Xero looked at three key aspects: Advisor connection, bank feed integration, and their platform of choice. He said Xero found that 92 percent of Xero users have an advisor and are connected to an accountant or a book keeper; 99 percent are connected to their financial data in real-time through a bank feed; and 40 percent of them are using an app.
"99 percent of small businesses have a bank feed connected now, so they've got daily, real-time insight into their information," he said. "It just flows in daily from their banks ... rather than waiting until the end of the month to reconcile."
Innes said that Xero is the only cloud accounting firm to offer 100 percent daily bank feeds, and within the next nine months, Xero expects to add another 40-plus financial institutions to its feed list. With some 100 financial institutions providing Xero with daily feeds, including 43 regional and industry credit unions, Innes said small businesses can make real decisions quickly.
Having just opened an office in Singapore, one of the new feeds to join Xero will be local bank UOB.
"Small businesses operate on a daily basis. If you're running a cafe, you can't wait until the end of the month to work out what your financial position is," Innes said. "You need to understand exactly where you are at."
Xero and Commonwealth Bank are expanding their relationship to include direct feeds for business and corporate credit cards for businesses to track discretionary spending and reconcile transactions as they come in.
"Small business is a massively fragmented market, so you can't compare a cafe to a farm, they're both small businesses but they are both completely different types of small businesses," Innes said. "It's about getting as much information into your financial accounts as possible. The idea is to go as deep as we can with the banks to make it easier for small businesses."
Also on Thursday, Xero announced its first lending partner in New Zealand, Fuelled, which is aimed at helping small businesses access capital. From Xero's platform, Fuelled will offer small businesses funding that is secured against unpaid invoices.
"Really our vision is to have a small business platform," Innes said. "Accounting is the core engine of that but it's all the digital connections that sit around the outside of that to help make a small businesses life easier."
Xero also unveiled Live Contacts, an integration with credit bureau Veda, which will link the public information of millions of businesses into the Xero accounting platform.
The partnership delivers businesses information on registered business names, addresses, ABN/NZBN numbers, and industry classifications of millions of businesses, in a bid to ensure customer information is clear, accurate, and completely up to date.
Additionally, the Veda partnership will allow Xero customers to see current credit risk indicators of the businesses they work with to better assess the likelihood of late or non payment.
Disclaimer: Asha McLean travelled to Xerocon South as a guest of Xero.