The future of cross border payments in an internationally ‘local’ world
Consumer demand for fast, frictionless and low cost international transactions has necessitated an increasingly global payments landscape. But, until recently, this has been a difficult market for small and medium sized merchants to capitalise on. Anders la Cour, Chief Executive of payments utility, Saxo Payments Banking Circle, examines how payments businesses could address this challenge, as the company releases new research on the payment pain points faced by merchants…
A major stumbling block for small businesses trading internationally is the lack of a global account infrastructure that they can access quickly and cost-effectively and this is exacerbated by the need to manage multiple banking and supplier relationships. Our research suggests that merchants are opting for one partner for all their banking needs, locally and internationally. Could this be simply because it’s too time-consuming to manage multiple relationships?
Over half (58%) of respondents said they have just one banking relationship, just over a third (35%) have one provider to handle all international payments and another for local payments, while 7% have one provider for each country in which their business trades. Of course, if one provider is offering the best service and the most competitive rates, then there’s nothing wrong with that approach, but our research among merchants seems to suggest otherwise.
The biggest concern for merchants when it comes to cross border payments is transaction fees (50%). 40% are concerned about getting the best FX rate, and 37% are worried about the risk of fraud. FX fees and the speed of processing payments are also significant areas of concern for 29% and 27%, respectively. What’s more, over a third (39%) stated that these concerns have undeniably put a stop to any international expansion plans, thus preventing them from reaching their full potential and maximum customer base.
The findings of the Saxo Payments merchant research will be launched at Money20/20 Europe in a new whitepaper – ‘Cross border payments for cross border merchants: An internationally ‘local’ future’. To register for a copy of the full whitepaper visit: www.saxopayments.com/register-for-merchant-white-paper-an-internationally-local-future
A perfect opportunity
I believe this situation provides the perfect opportunity for the burgeoning world of payments providers that are aiming to offer an alternative to the traditional banks.