B2B Payments

EU Late Payments Irk Asian Markets

The global late payments problem seems to be spreading. While U.K. small suppliers champion reform to combat being burdened with longer terms by their large, corporate buyers, recent research reveals that late payments are an issue among many Western Europe markets.

The epidemic is not isolated, either. In fact, according to recent reports, Asian suppliers are being urged by the market to prepare for and combat late payments from their Western European buyers. New findings from the Atradius Payment Practices Barmeter revealed that about 40 percent of both foreign and domestic B2B invoices were defaulted on. An average of 7 percent remained outstanding 90 days past their due date, and 12 percent were found to be uncollectable.

The findings are straining trade relations with Asia, experts said. “Europe’s economy has a significant impact on Asian countries, particularly due to the high level of two-way trade volumes and investment flows between the two continents,” Managing Director of Atradius Asia Eric den Boogert said. “The EU has been a key source of foreign direct investment and other capital flows to the region.”

But ongoing late payments within the region could threaten that flow of capital to Asian markets. Europe’s continued economic recovery additionally means that trade levels could be subdued for some time. According to data from the European Central Bank, the EU was responsible for more than 28 percent of Asian trade last year, highlighting just how dependent Asia is on EU business.

“In the current business climate, we see an urgency for businesses in Asia to step up their risk prevention approaches to ensure business sustainability and avoid cash flow problems that may affect their businesses in return,” den Boogert added.

Atradius Asia’s advisory for Asian businesses to protect themselves against late payments from overseas buyers highlights how late payments are an international problem. While reports have focused largely on the U.K. and its legislation to combat the issue, the U.S., Italy, and other parts of southern Europe are all reporting longer payment terms, an issue that is likely to affect suppliers not only in Asia, but across the globe.


New PYMNTS Study: Subscription Commerce Conversion Index – July 2020 

Staying home 24/7 has consumers turning to subscription services for both entertainment and their day-to-day needs. While that’s a great opportunity for providers, it also presents a challenge — 27.4 million consumers are looking to cancel their subscriptions because of friction and cost concerns. In the latest Subscription Commerce Conversion Index, PYMNTS reveals the five key features that can help companies keep subscribers loyal despite today’s challenging economic times.

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