Real-Time Cross-Border Payments Open New Markets for SMBs

Cross-border payments have traditionally been complex, process-heavy affairs.

Olann Kerrison, vice president of foreign exchange (FX) and global payments at American Express, told PYMNTS in an interview that there’s a real need for B2B cross-border payments innovation, especially for the small- to medium-sized businesses (SMBs) seeking to tap into new markets and to forge new relationships with vendors and suppliers.

For these SMBs, the key is to deliver cross-border solutions that do not require a technical heavy lift, and which can integrate seamlessly with a broad range of other business payments, even offering rewards and transparency that can cement the bonds between buyers and suppliers.

“There are so many opportunities as they go international,” he said of those SMBs, “and they must find wider markets outside of their home base … but there are many challenges as they go to pay those suppliers.”

Pain points continue to plague new efforts to find markets and revenue streams, as SMBs have historically been buffeted by shifting exchange rates and less-than-ideal visibility into whether funds have settled, where and when (and sometimes, even, for how much). Simply put, it’s no easy undertaking to make sure that information is flowing between international accounts.

Part of those challenges rests with the fact that SMBs must grapple with legacy technology and systems that are still in place, while so much of the world is looking for more mobile-friendly, easier-to-use interfaces.

SMBs need to harness technology in order to pay suppliers in their preferred, local payment methods. Faster payments networks offer what Kerrison termed “massive” opportunities for a better customer experience with B2B cross-border payments. For SMBs, they can make B2B payments as easy as making a peer-to-peer (P2P) payment on one’s phone.

To leverage those technologies, Kerrison said SMBs would do well to link with providers (American Express among them). Those providers make it easier to integrate with suppliers’ bank accounts and find funding in local currency.

Providers, he added, can also help ensure that compliance boxes are ticked, that payments are formatted correctly and that any additional information, such as invoices, is provided, especially when so many of us are not in the office to specify that information.

And, as he noted of the benefits of enlisting providers, “it’s always important for SMBs to be aware of and comply with the latest regulations, which can sometimes be complex.”

Realizing Other Benefits

American Express’s Global Pay, for instance, allows customers to log in to their existing card accounts where they can see their cross-border payments functionality and lets them earn rewards they can invest back into business operations, Kerrison said.

Additionally, paying the right amount, on time, and in the right currency, can go a long way toward incentivizing suppliers to be loyal to a particular buyer. The batch processes that have been around for decades are giving way to more efficient methods, which have positive ripple effects up and down supply chains.

“Being able to deliver the funds locally, often with a same-business-day payment, opens up a whole raft of opportunity for SMBs,” Kerrison said.

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