Small Business Cross-Border Cash Flow Helped by Marquee Payments Partnerships

Small- to medium-sized businesses have been hobbled on a global stage.

The lure of eCommerce is that digital channels level the playing field for…well, just about anyone.  Theoretically at least, smaller firms should be able to compete with even the largest of eCommerce juggernauts if they have the right products and services, the payment methods most preferred by customers, and the back-office functions to handle it all.

The promise has not kept up with reality even though the vast majority of companies are smaller players, and thus should conceivably have the tools they need to build an international presence. As PYMNTS found last year, 90% of companies globally qualify as small- to medium-sized businesses (SMBs), representing more than 50% of employment worldwide.

Pain points have persisted. About 27% of SMBs see the complexity of cross-border payments as a hindrance to their ability to grow, and just 23% of small businesses found their current cross-border payment solutions to be very or extremely satisfactory.

That leaves a staggering three-quarters of SMBs dissatisfied with what’s on offer from their financial institutions (FIs) or other providers.

Asia represents a particular market of promise. In PYMNTS’  “The Emerging APAC Opportunity,” 39%  of U.S., U.K. and Canadian SMBs are selling or planning to sell to APAC customers in the next year.

A Strain on Resources

For companies that want to cross time zones and currencies, we found that small businesses lacked the technical or human resources required to manage their go-to-market strategies.

The solution may lie with partnerships and relying on providers’ expertise. As shown just this week, a number of marquee names in financial services are helping SMBs embrace payment flows, compliance and to meet new customers where they want to be met.

On Monday (Jan. 30), the Monetary Authority of Singapore (MAS) granted Fiserv a Major Payment Institution (MPI) license.

That license will allow the company to continue offering merchant acquiring services and to provide cross-border money transfer services and real-time account transfers.

Last month, the MAS granted a similar license to the commerce technology firm Payoneer. In an interview with PYMNTS, Anand Bindumadhavan, the firm’s vice president of global banking, said making cross-border payments should be as simple as sending email.

Bindumadhavan noted that the relative dearth of truly global players has opened up “significant space” for FinTechs like his to help underserved SMBs find working capital, access cross-border payments functionality, and grow their businesses internationally.

Looking for Better Cash Flow Visibility

Of course, one need not cross borders to find the advantages inherent in better fund flows and cash flow visibility.  The same week that Fiserv made its aforementioned announcement, American Express unveiled its own initiative aimed at helping small businesses — specifically, smaller U.S. companies — modernize.

Amex said Tuesday (Jan. 31) that it has launched a digital cash flow management hub for smaller firms. The new Business Blueprint provides one place small businesses can go to get cash flow insights, access digital financial products and manage their Business Cards. The platform offers money-in and money-out cash flow analyses, expense trends, and 30-day cash-balance projections, alongside other services.

Separately, as detailed in the report “Tapping the Payments Opportunity in SMB Retail,” a PYMNTS and Amex collaboration, 65% of mid-sized businesses are spending 14 hours per week on administrative tasks for payment collection.

The report also noted that 88% of finance professionals said the complex nature of cross-border payments collection hampered their ability to grow internationally, and 95% said they could accelerate global expansion if they had an easier way to deal with exchange rates.

Payment hubs and real-time analytics, then, may offer small businesses some of the easiest onramps to scale their businesses in home markets — and international ones, too.