Steve Lemon, Co-founder and Vice President, Currencycloud
Industry View from
SMEs can still win in international business
For too long, SMEs have been under-served by the banking and payments industry, particularly with international payments. The opacity of costs for payments and foreign exchange has meant SMEs are overcharged to the tune of £4bn a year, while 80% are unaware of the true costs of foreign exchange.
It has never been easier to do business internationally, and 43% of SMEs have admitted they would find trading internationally more appealing if there was more transparency with the associated costs of making international payments.
The alternative – setting up in-country banking facilities like a large corporation – is incredibly complicated, time-consuming and expensive. But without being able to invoice in a local currency, SMEs risk losing out on FX rates, losing out through cross-border payments costs and subsequently risk losing out on business opportunities.
But change is afoot.
The payments industry has seen huge innovation over the last five years for consumers, and while the benefits to the business world have been slower to materialise, businesses are beginning to expect the same level of service in their work environment as their personal lives.
The good news is that a combination of factors is beginning to deliver solutions.
While regulators are making efforts to make things easier, the real changes are being delivered through emerging technology and an entrepreneurial spirit from Fintechs creating services that directly benefit business. For example, Currencycloud, a company disrupting cross-border money flows, allows businesses to avoid some of the charges associated with international payments, while delivering a level of speed and transparency that traditional banks simply can’t offer.
And while banks traditionally viewed Fintechs as the competition, they are now much more open to collaboration and are working with them as valued partners. And that is good news for SMEs.
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