Despite the many innovations in cross-border payments, a new study from international payments engine Currency Cloud shows that paper checks are still a major payment method used by U.S. businesses when making international payments.
In fact, the data from the survey shows that 47 percent of U.S. businesses still bank on paper checks to make those payments. That's a stark comparison to the 70 percent of U.K. businesses that said they process international payments electronically. And even more telling is that nearly half of the U.S. businesses' owners who were surveyed said they were unaware of cheaper or more efficient methods to send money cross border.
While 37 percent of U.S. businesses surveyed indicated that the delay in international payment methods was a business pain point, another 40 percent said that the process of changing international payment methods is another obstacle in transitioning to digital payments. The expense of sending payments internationally was cited as another major business pain.
Because it typically takes about two business days for international payments coming out of the U.S. to be processed — and in some cases 3-5 days, most business owners expressed frustrations about the lag time. Of those surveyed in the U.S., only 22 percent said those payments are processed immediately.
And on the SMB side, the results are even more staggering. The small businesses survey revealed that 60 percent of companies with under 100 employees still sent paper checks for cross-border payments. Like the bigger businesses, the lack of education in the industry seems to be a major reason why more haven't made the switch.
The U.S. survey showed that 43 percent of businesses didn't know of better solutions.
“We are experiencing a tech-enabled revolution which is spawning the on-demand economy. Consumers already benefit with near real-time services such as Uber, GrubHub and Etsy. In this context, it is imperative businesses implement solutions that allow them to remain agile in order to compete," said Mike Laven, CEO of Currency Cloud. "It’s surprising to see that while consumers are adopting payment technologies such as Venmo and Xoom, the vast majority of U.S. businesses still rely on paper checks for international payments.”
But technology should be enabling, not prohibiting more businesses from making the electronic payment switch when it comes to cross-border payments.
“In today’s technology-driven world, businesses should not be relying on slow, costly, archaic methods to make their international payments. It is clear that U.S. businesses are in need of more education on affordable, efficient solutions to help them move money across borders – allowing for smooth operation on a global scale," Laven said.