The traditional logic was that small businesses have smaller needs than their peers.
But this week, Google announced new enterprise-grade artificial intelligence (AI) tools designed for small and medium-sized businesses (SMBs). This move follows Anthropic’s Claude SMB Tour, in which Claude for Small Business travels to deliver half-day live AI fluency training to 100 local small business leaders, demonstrating a significant upgrade in small business capabilities.
But behind the headlines about AI, the biggest upgrade on Main Street may be taking place in an unglamorous system of record.
Across the small business technology industry, software providers are transforming systems of record into systems of action, with payments emerging as a catalyst. Beyond simply tracking invoices, expenses, supplier obligations, and customer transactions, today’s platforms enable businesses to initiate, manage, and automate payments directly within the workflows where those activities are initiated. This is a particularly attractive proposition for resource-constrained companies seeking efficiency.
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Main Street is changing as payments become core to workflows
Business owners have come to expect their software solutions to do more than just organize information, they also ease the administrative burden. However, their expectations usually serve as a leading indicator of the reality that existing and traditional solutions can provide. For example, an accounting platform might generate an invoice, but the business owner must exit the application to collect payment. While purchasing managers can approve vendor invoices within the accounting system, actual payments often occur through bank portals, leaving financial workflows fragmented across multiple providers, interfaces, and processes.
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Today’s SMB solutions work to eliminate these handoffs. After all, it’s good to keep track of your bills. It’s better to pay automatically. Tracking your invoices is important. It is more important to collect payment quickly.
Embedded finance is central to this transformation. The rationale is simple. Payment represents the moment when corporate activity becomes economic activity. This is where cash flow changes, supplier relationships are maintained, and revenue is realized. By controlling the payment experience, SMBs gain a deeper role in both the retail customer commerce experience and the wholesale supplier experience.
The PYMNTS Intelligence report, “Preparing for Change: Why Almost Half of Small Businesses Want to End Cash and Checks,” produced in collaboration with Mastercard, found that many small businesses want to reduce their reliance on cash and checks by switching to the latest digital payment options.
What started primarily as payment acceptance has expanded significantly. Our small business platform facilitates accounts payable, accounts receivable, instant payments, working capital loans, business cards, expense management, and cash flow forecasting.
Also read: AI needs customers, more than chips
Future system of record for small and medium-sized businesses
Traditionally, systems of record have been repositories of information. Its primary value lies in storing, organizing, and reporting business data. Next-generation platforms are becoming more dynamic and actively participating in business operations.
Payments is accelerating this transformation because it sits at the intersection of software, finance, and operations. Every business transaction ultimately moves money, making payments a natural focus for platforms seeking greater relevance and deeper customer relationships.
The most important software platform of the next decade may not be the one that best records what your company does. These can help companies decide and implement what happens next. As global commerce and digital innovation intersect, workflows increasingly cross borders.
“Small and medium-sized businesses are making cross-border payments on a daily basis rather than occasionally. It is becoming part of mainstream banking rather than an occasional or occasional banking activity,” Pratik Kowala, global head of remittance solutions at Mastercard, told PYMNTS.
“If banks don’t offer truly intuitive, flexible and transparent solutions to these small and medium-sized businesses, it will be very difficult to maintain customer loyalty,” Kowala said.
This is supported by a PYMNTS Intelligence study conducted with Mastercard, which found that 57% of small and medium-sized businesses (SMBs) in the U.S. source goods and production materials from overseas suppliers, making cross-border payments part of their daily operations.
The challenge for SMBs is to balance integration and flexibility, sacrificing optionality for operational efficiency. As AI tools spread across the SMB landscape, maintaining a clear focus on results will only become more important. PYMNTS wrote last month that small businesses are “an important testing ground for AI because of their different constraints.”
The report added that mid-market companies often cannot afford to rebuild their systems from scratch. They have low profit margins, rely on legacy software, and focus on operational continuity before technological experimentation.
“For these businesses, AI will only be successful if it is put to practical use,” PYMNTS writes.
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