Adyen Looks to Canadian Lending; Pateno Buys XTM – Digital Transactions

Smaller Canadian merchants are skating on thin ice as the holiday season approaches, according to survey results from the payments provider Adyen NV. The company’s research indicates merchants are battling soft consumer spending as well as mounting costs and tariff headaches, leaving little margin for further pressure, Adyen says. Such pressures can lead to a stronger market for small-business lending, says Adyen, which offers the loans on top of its point-of-sale processing capabilities.

The survey, which last month queried 1,015 small and medium-size merchants, found nearly three-quarters of owners indicating interest rates and inflation on top of tariffs have complicated their businesses. Beyond that, 34% say profit margins have slimmed under pressure from upward momentum in supply costs, cited by 40%. Some 29% say they have lost sales as a result of reduced consumer spending.

The opportunity for Adyen and other payments companies that offer short-term business lending lies in the apparent willingness of business owners to look at alternative funding sources, according to Adyen. Its research indicates 23% appear willing to seek funding from a technology platform they are currently using, Adyen says. This is up from 8% of proprietors overall, according to the research.

Adyen began offering business checking accounts and small loans to merchants in 2018 through banking licenses it maintains in the United States and Europe. The Amsterdam-based company was founded in 2006. Payments players competing in the merchant-funding market include Stripe, Checkout.com, and Payoneer.

Adyen says its survey uncovered unmet needs for small businesses, at least in Canada, that payments players can help meet. “Canadian businesses are under real pressure right now, but there’s a clear opportunity in these findings,” says Sander Meijers, Adyen’s Canada country manager, in a statement. “Owners are telling us that faster access to their own revenue and simpler paths to funding would make a real difference, especially as they grow.”

Also in Canada, Pateno Payments announced Friday it has closed on its acquisition of assets belonging to XTM Inc., including its Everyday Payment program. The Everyday service allows businesses to funnel tips and other employee payments via prepaid cards.

The closing follows an approval from the Ontario Superior Court of Justice Sept. 1. XTM in February was ordered by the Bank of Canada to stop all retail payment activity, including the Everyday Payment service. Later in the month, the bank issued a revised temporary order permitting XTM to start up limited retail payment activity but only under the supervision of a court-appointed monitor.