Cross-Border Conflict: U.S. Small Businesses Face Expansion Hurdles Due to International Banking Complexities
15 Décembre 2021 - 2:00PM
Business Wire
Research from Wise shows that 40% SMBs
operating internationally say international payments have made it
harder to operate abroad
A new study released today by Wise (LSE: WISE) found that
nearly a third (34%) of U.S. small and medium sized businesses
(SMBs) are currently operating internationally, but broken payments
and banking technology remain a barrier to international
ambitions.
The study, which polled more than 4,800 SMBs across the world,
found the most common reasons U.S. SMBs that are currently or
intending to operate abroad seek to expand internationally are to
reach new customers (55%), to improve long term growth prospects
(33%) and to source new suppliers/resources (24%). The results are
a strong indication of opportunities for SMBs to grow and expand
their business by tapping into international markets.
However, while U.S. SMBs see significant opportunities in
expanding globally, nearly half (49%) have felt discouraged or even
prevented from expanding internationally. Among factors
discouraging or preventing these U.S. SMBs, the cost and complexity
of international payments ranked highest (45%), well ahead of
cultural barriers (30%), supply chain and logistics (29%) and lack
of capital/resources (27%).
“Today’s digital tools and marketplaces have created more
opportunities for small businesses to operate globally, yet many
are held back from ever doing so by a series of disconnected
domestic banking systems that present significant barriers when
operating internationally,” says Lindsey Grossman, Director of
Product, North America at Wise. “Making international payments
fast, simple and transparent will go a long way toward helping
small businesses fully reach their business goals.”
A concerning finding from this survey is that even those already
operating abroad are facing international banking woes. Eight in
ten (79%) of U.S. SMBs already operating abroad, known as
micro-multinationals, say it’s harder to operate abroad today
compared to five years ago, particularly due to international
banking (40%) including managing multiple currencies, bank accounts
and costs.
Even more alarming, less than half (47%) found it easy to
understand the cost of sending money abroad, and only 12% were able
to correctly identify the costs involved in cross-border payments–
not realizing that most providers charge both an upfront fee and a
fee to the mid-market rate.
Wise, the global technology company building the best way to
move money around the world, provides SMBs an alternative to
traditional providers. Businesses can send money abroad for a
small, up-front transparent cost, with no fee hidden in the
exchange rate with 40% of transfers moving instantly.
Business-friendly features include the option to obtain local
account details in 10 currencies, which allows businesses to get
paid and pay others like a local, all without ever stepping foot
into a foreign bank.
“As a small business owner doing business internationally,
living and working like a local is something I’ve done for eight
years, but making payments has often proved to be a challenge,”
said Jessica Watson, CEO and creative director of Points North
Studio, a design studio based in Baltimore, Maryland. “Wise has
been instrumental in helping us work with new talent and clients
across the world. Unlike traditional banks, with Wise we are able
to receive local bank details in Europe and have been able to
efficiently manage money across borders without losing money to
costly fees.”
Additional findings from U.S. SMBs already doing business
internationally (micro-multinationals) include:
- The Pandemic’s Global Impact: 46% of
micro-multinationals have delayed or canceled international
expansion plans. Nearly one in three (32%) found it more
challenging to attract new customers.
- Digital Tools To The Rescue: 75% of micro-multinationals
say that technology has helped their business during the COVID-19
pandemic, so much so that 24% were able to reach new customers, and
31% were able to offer new services and products digitally.
- Banks and “old world” payments dominate: 70% of U.S.
micro-multinationals rely on bank transfers or card payments when
sending or receiving international payments yet, only 1-in-10 (12%)
believe that they are getting bang for their buck from their
banks.
To download the full report and learn more about how big banks
block small businesses’ international ambitions, visit
https://wise.com/p/msmb-survey.
About the research: The research took place online
between the 16th August - 21st September 2021. The sample comprises
4,835 global senior decision makers in private sector micro, small
and medium-sized (SMB) businesses across the world, of which 502
were in the United States. Micro-multinationals in this study have
been classified as SMBs that are currently operating abroad. The
research was commissioned by Wise and independently conducted by
YouGov.
About Wise: Wise is a global technology company, building
the best way to move money around the world. With the Wise account,
people and businesses can hold more than 50 currencies, move money
between countries and spend money abroad. Large companies and banks
use Wise technology too; an entirely new cross-border payments
network that will one day power money without borders for everyone,
everywhere. However you use the platform, Wise is on a mission to
make your life easier and save you money.
Co-founded by Kristo Käärmann and Taavet Hinrikus, Wise launched
in 2011 under its original name TransferWise. It is one of the
world’s fastest growing, profitable tech companies and is listed on
the London Stock Exchange under the ticker, WISE.
11 million people and businesses use Wise, which processes over
£6 billion in cross-border transactions every month, saving
customers over £1 billion a year.
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version on businesswire.com: https://www.businesswire.com/news/home/20211215005254/en/
Press: Ben Liwanag Benjamin.Liwanag@Wise.com
Wise (LSE:WISE)
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