TITLE: SME Banking and Fintech Review: Tokenised Sterling Goes Live, Lloyds Get Paid, and Cross-Border Payment Shifts
The week ending 28 September 2026 brought major changes across SME banking, payments and finance. Tokenised sterling moved into live customer use, fintechs strengthened their position in SME lending, and banks continued embedding accounting tools directly into business accounts.
Executive summary
- Seven UK banking groups completed live customer transactions using tokenised sterling deposits through the Great British Tokenised Deposit initiative.
- Lloyds is preparing to launch Get Paid, a free in-app invoicing and payment collection tool for business banking customers.
- Mastercard and Bain found that 91% of internationally active SMEs expect to change their primary cross-border payments provider within two years.
- Innovate Finance reported that challenger banks and non-bank lenders now provide 68% of UK SME lending.
- Teya launched instant-access Savings Pots paying 3% AER variable, while iwoca reported £366 million in revenue for 2025.
- Verto, Visa and Pay.com all expanded embedded, multi-currency payment infrastructure for international businesses.
This week’s SME banking and fintech review
Tokenised sterling reaches live customer transactions
On 24 September, Barclays, HSBC, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander completed live interbank customer transactions using tokenised sterling deposits.
The transactions were delivered through the Great British Tokenised Deposit (GBTD) initiative, convened by UK Finance, using infrastructure built by Quant. The live use cases included a remortgage payment and a consumer marketplace purchase.
The next step is settling digital assets using tokenised customer money.
Tokenised deposits are different from stablecoins. They remain liabilities of the issuing bank and retain the conventional protections associated with bank deposits. Stablecoins generally represent a separate form of digital money and do not automatically carry the same deposit protection.
Economic Secretary to the Treasury Lucy Rigby said:
“These live transactions show how tokenized deposits can deliver practical, real-world benefits, contingent payments that give customers greater control over their money.”
Quant founder and CEO Gilbert Verdian added:
“Tokenized deposits have the potential to play a key role in the evolution of digital money and payments in the U.K. and beyond.”
The development follows SoFi becoming the first national bank to go live with stablecoin settlement across Mastercard’s network on 22 September. The Bank of England and FCA are also preparing the UK payments system for tokenisation and longer settlement hours.
What should your business do? No immediate change is required. However, review your reconciliation procedures. Record each payment by transaction date, currency, counterparty and settlement date. New payment rails may change when funds become final, even if the customer experience appears instant.
Lloyds prepares free embedded invoicing
Lloyds is preparing to launch Get Paid, an in-app invoicing and payment collection service powered by BankiFi. It is expected to launch later this year for business banking customers at no additional cost.
The service will allow businesses to:
- Create and send invoices.
- Generate secure payment links.
- Track paid and outstanding invoices.
- Send automated payment reminders.
- Manage invoicing inside the Lloyds app and online banking.
This is part of the wider move towards embedded accounting, where banking applications provide financial workflows traditionally handled by separate software. Earlier Lloyds and BankiFi work delivered Making Tax Digital for Income Tax functionality through the Lloyds Business Current Account.
The need is clear. UK Government research found that 49% of small businesses say customers take longer to pay than agreed terms. The Office of the Small Business Commissioner estimates that late payments contribute to around 14,000 business closures each year. UK businesses are reportedly owed approximately £26 billion in overdue payments at any time, or around £17,000 per business.
Lloyds’ Ruchir Rodrigues said:
“Businesses shouldn't have to pay extra for the tools they need to get paid.”
BankiFi CEO Mark Hartley described invoicing, payment collection and tax administration as fundamental financial workflows.
Free invoicing can improve cash flow. But do not assume the bank is automatically your accounting system of record. Export or synchronise invoices, payments, credit notes and refunds into your bookkeeping records to avoid duplicated or missing transactions.
Cross-border payments are becoming a trust and visibility test
The Mastercard and Bain Money in Motion report, based on more than 1,000 SME decision-makers across 11 countries, shows how quickly payment preferences are changing.
Among internationally active SMEs:
- 91% intend to switch their primary cross-border payments provider within two years.
- 67% of businesses that already switched cited speed and more reliable settlement.
- Trust was the leading selection criterion at 35%, followed by speed at 34%.
- Cost and transparency each scored 28%.
- 92% already use multiple providers.
The market is expected to shift from banks to fintechs. In 2025, 42% of SMEs named a bank as their main cross-border provider, compared with 30% naming a fintech. By 2028, the report projects a reversal: 48% fintech and 28% banks.
The reason is infrastructure. Fintechs can hold local accounts or connect directly to domestic rails such as Faster Payments in the UK, PIX in Brazil, ACH in the United States and UPI in India. Wise, for example, became the first non-bank to obtain direct UK Faster Payments access, reportedly reducing partner bank fees by approximately 90%.
Before changing provider, ask:
- Can you track every payment in real time on every corridor?
- Are all fees and FX margins shown before payment?
- Does the provider settle in the recipient’s local currency through a domestic rail?
- Can customer-service issues be resolved in hours rather than days?
- Is data residency documented for every market?
The last question matters because Airwallex continues to face scrutiny in the United States following letters from Senator Tom Cotton and potential CFIUS review. This is a due-diligence prompt, not a conclusion about the provider. Request and retain current data-residency and processing documentation.
FCA backs open finance for SME lending
The FCA’s FS26/2 feedback statement, published on 17 September, found that FCA regulation is not a major barrier to SME finance.
The FCA instead iden
