Independent farmers, once reliant on paper cash and check transactions, are turning to fintechs and community banks to sustain gains made during the pandemic. John Adams reports in American Banker:
“Local farmers are turning to online channels to reach buyers, giving rise to a competitive fintech market that includes Barn2Door and e-commerce apps such as GrazeCart, FarmDrop, Farmingo and GrowBy. Community banks, which are concerned about the overall fiscal health of farms in a challenging economic environment, are also trying to expand banking relationships by offering ways to streamline farm operations.”
Barn2Door, as an example, has embedded Stripe for payments processing, giving local farmers easy access to turn to digital sales and expand their businesses beyond traditional markets:
“Selling directly to the consumer market, which is easier through an e-commerce interface, provides more flexibility and the ability to diversify a customer base quickly, according to (Barn2Door CEO Janelle) Maiocco. For example, Maiocco said one farmer in Iowa went from 30 deliveries a month to more than 1,200 per month by selling online.”
The direct-to-consumer shift has also attracted the attention of community banks, who now enjoy more confidence in the diversified revenue streams farms can utilize with the increased use of fintech-supplied tools.
“Banks that sell to agricultural businesses are concerned about loan repayments and returns. An increase in automation can potentially cut costs by speeding transactions, eliminating paper processing and better matching payments to availability of supplies. Businesses in other sectors are turning to digital payments and faster payment processing to address the same concerns.”
The combination for advanced technology and greater banking access appears to be resulting in significant growth for agribusiness which could also assist these businesses manage other issues such as supply chain and inflationary pressures in the current market.
Overview by Jordan Hirschfield, Director, Prepaid Advisory Service at Mercator Advisory Group