The business world is in the midst of a significant global shift. More businesses than ever before are engaging in international operations as technology makes it easier and more effective for companies to explore cross-border business opportunities. Small to mid-sized businesses (SMBs) are also increasingly pursuing global opportunities, and 64% of SMBs expect their total spend with businesses outside of the country to increase in the next six months, according to an American Express Survey.
The proliferation of companies needing to transact across international borders has increased the need for B2B cross-border payments innovation. Currently, sending and receiving payments across borders remains fraught with pain points to such a degree that nearly nine in 10 finance professionals reported that the complexities in cross-border payment collections hinder their business’s growth. In light of the challenges, many businesses are seeking better cross-border solutions. According to the American Express survey, for example, nearly half of U.S. SMBs and financial decision-makers are searching for a cross-border solution with transparent fees and rates and a simple user experience (44%).
The “B2B Cross-Border Payments Tracker®” explores some of the current pain points in B2B cross-border payments and how adopting better cross-border payments solutions can benefit merchants in a variety of ways.
Around the B2B Cross-Border Payments Space
One of the most significant barriers to effective B2B cross-border payments is the lack of standardization concerning application programming interfaces (APIs), according to a recent study from the Bank for International Settlements (BIS). The study found that eight in 10 payments operators cited a lack of API standardization as the top challenge to their adoption of APIs, which, in turn, poses a serious barrier to improving the B2B cross-border payments experience because APIs are necessary for the communication between networks in different countries. Unless networks share similar protocols and formats that underpin communication between systems, APIs will be unable to facilitate the exchange of information between these networks.
On a brighter note, American Express recently launched Global Pay, an online solution that enables U.S. businesses to make both domestic and international B2B payments. Business customers can use Global Pay to make secure payments, in multiple currencies, to their suppliers in over 40 countries. The platform also allows users to view and accept the associated exchange rates before making a transaction and access American Express’ estimates for when these payments will be delivered.
For more on these and other stories, visit the Tracker’s News and Trends section.
Unique Carpets Ltd. on the Ideal B2B Cross-Border Payments Partner
When Unique Carpets Ltd. found itself becoming one the largest importers of tufted 100% wool carpets in America, its need for a more effective B2B cross-border payments solutions grew. Finding a payments partner that provides simplicity, safety and security, while making the customer payment experience faster and frictionless is key for companies seeking such a partnership.
In this month’s Feature Story, Bob Binford, executive vice president at Unique Carpets Ltd., spoke with PYMNTS about the importance of selecting the ideal B2B cross-border payments partner.
The Problems and Promise of B2B Cross-Border Payments
B2B cross-border payments, like B2B payments in general, remain riddled with pain points. Unlike the consumer payments experience, efforts to improve the business payment experience have been distinctly lacking, resulting in a cross-border payments experience that is too frequently plagued with friction and unduly complex and cumbersome payments processes. For example, 27% of SMBs rank the complexity of making cross-border payments as one of their top obstacles.
FIs are aware of the problems and are actively working to address them. According to PYMNTS data, the most common solution FIs currently provide to reduce B2B payments friction is automated account validation. More solutions are needed, however. If FIs were to continue innovating in their cross-border payments offerings, companies believe they would reap many benefits. For instance, 64% of U.S. SMBs regard reduced fraud risk as the biggest benefit of cross-border payments innovation.
To learn more about how B2B cross-border payments innovation can benefit merchants, read the Tracker’s PYMNTS Intelligence.
About The Tracker
The “B2B Cross-Border Payments Tracker®,” a collaboration with American Express, examines some of the major pain points merchants encounter when sending and receiving payments across international borders and how addressing these issues with better cross-border payments solutions can yield a multitude of benefits for companies.
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