B2B Payments

Helping Entrepreneurs Reimagine A Borderless Economy

While the digital age has opened up doors for businesses to expand internationally, it’s a bit misleading to say that it’s easier than ever for small firms to step foot into new geographic markets.

Online-native companies and the cloud-based applications they run on have indeed lowered barriers for small and medium-sized businesses (SMBs) to connect with customers, business partners and even employees across borders. But when it comes to establishing operations abroad and managing money throughout the globe — whether it be reconciling finances across multinational business units or paying suppliers in foreign currencies — the challenges are vast.

The traditional process of setting up bank accounts in multiple jurisdictions is a headache and too resource-intensive for many small businesses, like B2B exporters. According to David Rosa, co-founder and CEO of Hong Kong-based Neat, this is true even for SMBs that use a bank with branches throughout the world.

“The customer would be considered a new customer at each location, and would have to go through the lengthy compliance processes multiple times,” Rosa recently told PYMNTS, “not to mention they usually have to visit the specific bank branch in person.”

Exploring Alternatives

This is a challenge for many small firms in Hong Kong, a global trading hub where international ties are critical to business success.

Yet the traditional banking infrastructure can limit that globalization. Neat aims to ease this friction by offering SMBs an alternative to the traditional bank account.

The company has strategic partnerships with ePayLinks, a Hong Kong-licensed Stored Value Facility that has its own partnership with Mastercard. For entrepreneurs, the FinTech allows businesses to grow internationally by providing company incorporation services as well as multi-currency business accounts to facilitate cross-border payments and manage liquidity throughout the world.

While supply chains remain in-flux, Rosa said he doesn’t believe the current volatility will impact the ability to move money around the world. On the contrary, the current state of uncertainty has opened up small businesses’ eyes to the importance of remaining agile and expanding internationally in a cloud-native environment.

“Now, more than ever, businesses will come to realize that physical closeness isn’t always needed in order to be productive,” he said. “We expect this will only lead to further growth in service exporting sectors … and generally, may lead businesses to have a more global outlook.”

Easing Payments Friction

The ability to manage liquidity in various currencies is an important one for expanding SMBs, but making cross-border payments remains a critical barrier. Rosa pointed to “high fees, long wait times and a lack of transparency” as the biggest points of friction small firms face when moving money across borders.

Neat looks to lower costs and boost efficiency through its partnerships with remittance companies to enable cross-border wire transfers, with its service enabling SMBs to store and remit funds in the local currencies of its various business accounts.

Augmenting its service is the Mastercard corporate card, with Rosa noting that commercial cards remain an important payments tool for small businesses and their employees to pay for services like software as a service (SaaS) and advertising, or finance employee business trips.

Enabling entrepreneurs to grow globally is all about providing them choice, including in the way they make payments, as well as the currency they send and receive them. With cross-border expansion, Rosa noted that it will become more important for small businesses to seek out expansion opportunities — and highlighted the opportunity of the financial services industry to modernize to address these needs.

“While the internet is enabling businesses to grow globally, the financial system is lagging behind,” he said, adding that he believes the world is moving towards an ecosystem in which “the concept of cross-border will disappear.

“Compare it to sending an email,” he continued. “You won’t think of it as ‘crossing borders.'”

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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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