With the volume of cross-border B2B payments projected to hit nearly $6.5 trillion by 2024, it’s small wonder that so much investment and innovation keeps pouring into the space. Financial access to, and inclusion in, new foreign markets will certainly create post-pandemic fortunes.
“Pursuing cross-border commerce can open the door to a host of new expansion opportunities and help boost bottom lines, as businesses are well aware,” according to PYMNTS’ July 2020 Smarter Payments Tracker®powered by Nium.
“Cross-border payments, once the exclusive domain of large businesses that had the resources to expand their operations overseas and afford the often-exorbitant costs related to payment processing fees and international shipping, are growing ever more popular among SMBs,” the Tracker states. “The emergence of new digital payment methods has leveled the playing field between large and small businesses, making it easier than ever for SMBs to transact abroad and open up new revenue streams.”
PYMNTS’ July Smarter Payments Tracker® is loaded with use cases laying out the cross-border payments terrain as the flood recedes, as it were, revealing newly-cut pathways for commerce.
There’s no questioning the opportunity that cross-border payments represents to small and medium-sized businesses (SMBs) and enterprises in the immediate future regardless of barriers, be they territorial or biological. In fact, the pandemic has boosted the fortunes of several cross-border payments platforms as they proved their value to people and business owners operating on lockdown.
Also, turns out it’s just smart business strategy. Just ask 1,000 experts, like Visa did.
“Pursuing opportunities in new international markets is one of the most important things a company can do to grow its business and boost its bottom line, according to a study of 1,000 C-level executives by card network Visa that found 87 percent of respondents expressing this belief,” the July 2020 Tracker states.
“Expanding business abroad, however, comes with its own unique challenges. Thirty-seven percent of respondents cited processing foreign transactions as one of their top barriers to entry in foreign markets, followed by legal and trade issues at 33 percent,” per the Tracker.
“Small businesses are particularly vulnerable to these obstacles: 39 percent of SMBs say they are not prepared to handle cross-border transactions, whereas only 14 percent of medium-sized businesses and 7 percent of large businesses said the same.”
Bringing Resilience Into Focus
As reopening and reinvention rolls inexorably forward, changed markets require fresh ways of doing things. For many firms large and small it will mean dramatically increasing cross-border trade — or trying to. Based on what we’ve seen recently, fortune favors the prepared.
“COVID-19 has definitely brought ‘resilience’ into focus — specifically how well-diversified a business is and how it will fare in periods of shock. Quality investors are going to fine-tune their investment criteria to pick companies that not only have a strong foundation and moat but also tick this new check box.”
Markets reward flexibility during times of financial stress, and that is increasingly the trend as after-effects of the pandemic ultimately flatten out and modified business patterns take hold.
“FinTech may be better insulated than other sectors from a capital retreat, especially when benefits that online financial tools bring to consumers and businesses are clearly illustrated amid the global lock-down,” Sholapurkar told PYMNTS.
“Many FinTech companies, including Nium, are hitting record-level growth since the start of COVID-19 lockdowns. Payments and BaaS, in particular, have both proved to be versatile domains that will become even more relevant in times when traditional businesses are slow to adapt, and [they] will continue to grow despite the recession.”