MasterCard Launches Cross-Border Payments Solution
The purpose of National Small Business Week is to “recognize the critical contributions of America’s entrepreneurs and small business owners,” according to the U.S. Small Business Administration’s website.
For MasterCard and Western Union, that goal was accomplished on Wednesday, as the two payments powerhouses announced a new partnership with a simple goal in mind: make it easier for SMBs to conduct cross-border trade.
Leveraging Western Unit Business Solutions, the partnership will “provide a direct foreign-exchange capability” for all companies using MasterCard Business Network. The agreement means that U.S. SMBs gain the ability to send international payments in over 135 currencies, gain real-time quotes, competitive foreign exchange pricing and more.
What challenges do SMBs face when making cross-border transactions, and how do MasterCard and Western Union believe their services will help SMBs grow? PYMNTS.com spoke with Raj Agrawal, president, Western Union Business Solutions, and Jay Singer, group head, U.S. commercial products at MasterCard, to learn more.
As Agrawal noted, there are approximately 150 million SMBs globally, and a significant percentage of those businesses operate in and around the U.S. SMBs account for 97 percent of identified importers in the country, and comprise almost 98 percent of identified exporters as well.
As such, helping SMBs to facilitate cross-border payments is important not just for their own business, but for the economy as a whole.
“SMBs have always been a large driver of the [U.S.] economy and economies around the world, and they will continue to be as we go forward,” Singer said.
Yet as SMBs know, effectively engaging in cross-border transactions is a complex process. Vendors may not accept card payments, business credit lines may be insufficient to handle overseas purchases, and cash flow issues can derail transactions.
“This is an area where small and medium-sized enterprises typically don’t have a lot of expertise, and this [partnership] gives them an easy way to do cross-border transactions and trade,” Agrawal explained.
Singer agreed, and noted that by easing the burden SMBs face when sending money across borders, MasterCard and Western Union will free these businesses up to focus on their core competencies and their goals.
“The whole thought here is, we want to make sure smaller companies are able to focus on their passions, the reason why they’re in business today. It’s not to focus on the day-to-day operations, or the more mundane operational elements of managing cash flow,” he pointed out. “We want them to focus on acquiring new customers, growing their business, retaining their existing customers … doing all the things that can help them sort of achieve their passion.”
To that end, Agrawal emphasized that because his company’s new partnership with MasterCard focuses on small businesses and cross-border transactions, it’s tailored specifically to help solve common paint points and allow SMBs to operate more freely.
“We want to provide [SMBs] a high level of service and address their specific needs. We just give them awareness of the basic tools that are available to them to help them manage their overall cash flows, and protect margins against market volatility, which is something that we’ve seen a lot of lately,” Agrawal said.
Singer added that the partnership is really focused on leveling the playing field for SMBs, and granting them access to similar tools that their larger counterparts use with regularity when conducting cross-border transactions.
“The challenge [SMBs] have is they don’t necessarily have the resources, or the expertise, or the support, necessarily, that maybe larger organizations have. Things like expense management, reporting, spending controls, purchasing power… these are things that we provide,” Singer said.
“We like to say at MasterCard that most small businesses, or smaller businesses, don’t think of themselves as small. They just think of themselves as they haven’t finished growing yet. “
To hear more from Singer and Agrawal on the new partnership between MasterCard and Western Union, listen to the full podcast below.
*If you have trouble with the audio player above, click here.
Executive Vice President, Western Union, and President, Western Union Business Solutions As Executive Vice President and President of Western Union Business Solutions (WUBS), Raj Agrawal is responsible for leading the continued growth and expansion of all WUBS products and services worldwide. He is based in London.
Previously, Agrawal was responsible for regional global financial planning and analysis for Western Union. Agrawal has been with the company since 2006 and has held roles of increasing responsibility, including Treasurer and Senior Vice President for Finance in the EMEA/APAC region.
Prior to joining Western Union, he was in the dual role of Treasurer and Vice President of Investor Relations for Deluxe Corporation. Agrawal started his career in the automotive industry at General Motors Corporation in Michigan, USA, as a manufacturing engineer. He later joined Chrysler Corporation, serving as Senior Financial Analyst, and General Mills, Inc., where he held a variety of positions including Assistant Treasurer. Agrawal holds an MBA from Columbia University.
Jay Singer is group head, U.S. Commercial Products at MasterCard Worldwide. In this role, he leads the U.S. development and commercialization of the MasterCard innovative commercial products and solutions that serve small businesses, mid-to-large market organizations and public sector institutions.
Mr. Singer joined MasterCard in 1997. He began his career as director of Marketing Consulting where he supported the acquisition, portfolio management and product development programs of our U.S. customers. In 2000, he moved to Hong Kong where he spent four years establishing the MasterCard Advisors business in Asia as a business development and consulting lead.
In 2004, Mr. Singer joined the Citi Global Account team as account leader, for the U.S. Small Business and Diner’s Club portfolios. He was elevated to general manager, Global Strategy and Implementation, where he was responsible for strategy, business development and implementation for all Citi portfolios globally.
Prior to joining MasterCard, Mr. Singer held several roles of increasing responsibility in the Consumer Cards Group at American Express. His experience included customer acquisition, portfolio management, new product development, co-branding and relationship management. He also held sales and account management positions at the consumer product company Keebler.
Mr. Singer holds an M.B.A. from the Stern School of Business at New York University, and a B.S. in Marketing from the Pennsylvania State University.