A global guide to the SMB market for fintechs and financial service providers

USA

Read on to learn about:

• The size and composition of the small business market in the USA
• The fintech ecosystem and regulatory environment
• The top financial platforms in the region

The market at a glance

Size & make up of the market

The USA hosts around 10% of all SMBs worldwide, although the SMB sector contributes a smaller percentage of employment than other OECD nations, at 42%.

International trade

The proportion of SMBs exporting in the USA is particularly low. For example, 29% of US SMBs are active exporters vs. the OECD average of 39%.

Most popular financial software

Intuit QuickBooks has long led the accounting software market in the US for SMBs, their Desktop product remains popular, although the majority of investment is focused on QuickBooks Online. Shopify and Wix are the joint leaders in eCommerce.

The fintech ecosystem

The USA is the global leader in fintech, accounting for around 1/3 of all fintech investment in the world in H1 2022, according to KPMG. The largest subsector of the ecosystem is digital payments, valued at $1.2 Trillion in 2021.

Top financial software platforms

75% of SMBs in the USA use specialist bookkeeping software
49% of SMBs in the USA use digital tools for collecting payments (eCommerce, PoS)
38% of SMBs in the USA use digital tools for making payments

SMB tech readiness and the fintech ecosystem

Tech readiness and regulatory environment

Open Banking regulation in the US has been slow, particularly compared to the UK and Europe. However, the Consumer Financial Protection Bureau (CFPB) confirmed that it will propose a Section 1033 rule to move the US closer to ​Open Banking regulation in 2023. It hopes to issue a final rule in 2024.

The 1099-K tax reporting rule - due to come into play from January 31st, 2024 - will require all credit card providers and third-party payment platforms, such as Mastercard, PayPal, Shopify, and many others, to report on the payment transactions for businesses. The previous threshold of $20,000 is being reduced to $600.

Fintech ecosystem

The United States leads the world in the strength of its fintech ecosystem.

Fintech entities have had a significant impact on the financial services sector in the US. They are influential across payments, lending, digital currency, advisory services, and financial education.

Perceived initially as disruptors, traditional financial institutions have come to view fintechs as strategic partners, investment opportunities, and acquisition targets.