Uncovering the Potential of the Global SMB Cross-Border Payments Sector
In a new report, the evolving landscape of Small and Medium-sized Enterprises (SMBs) payments is under the spotlight, with a particular focus on the cross-border opportunity within the market. As digitalisation continues to unlock new possibilities, SMBs – which make up the majority of businesses worldwide – are becoming increasingly significant players.
The report delves into the strategies of companies targeting the SMB audience, with industry leaders such as OFX, Payoneer, Sunrate, and Convera at the forefront of the discussion. One key strategy involves offering multi-currency, localised payment solutions to accommodate the diverse needs of SMBs, including those in emerging markets. By supporting local payment methods, costs are reduced, and accessibility is improved where traditional banking infrastructure is weak.
Another critical aspect is leveraging technology for speed and transparency. Real-time tracking platforms, dashboards, and instant settlement capabilities are becoming standard, giving businesses better visibility and control over payment status and timelines. Instant payment services like TARGET Instant Payment Settlement (TIPS) and SEPA Instant Credit Transfer schemes facilitate faster, harmonised transactions in multi-currency environments within Europe and potentially beyond.
The adoption of emerging technologies such as stablecoins and open banking is also seen as a way to enable near-instant, low-cost global cross-border transfers. Fintech companies are focusing on digital wallets and API-driven solutions to provide seamless payment experiences for SMBs and remote employees worldwide.
However, the report also underscores the challenges faced by SMBs in cross-border payments. Foreign exchange markups and hidden fees remain a major issue, with SMBs often facing non-transparent and costly currency exchange fees that erode margins. Choosing suitable payment methods is another complex issue, with a variety of options available, each with trade-offs in speed, cost, and regional accessibility.
Payment tracking challenges and long settlement times in correspondent banking chains cause uncertainty, complicating cash flow management for SMBs. Infrastructure limitations in emerging markets and regulatory and compliance complexity are further challenges that providers must navigate to ensure smooth international transactions for SMB clients.
The report includes an industry-leading newsletter on cross-border payments and provides insights into future trends for the SMB market, highlighting the importance of supporting SMBs in emerging markets. It also emphasises that the cost and speed of cross-border payments can be a barrier for SMBs going global, with ecommerce companies on the rise in the SMB payments market.
The report offers access to extensive research and analysis on cross-border payments globally, making it an invaluable resource for businesses seeking to navigate the complex world of SMB payments. The second-largest Total Addressable Market (TAM) for retail cross-border payments lies with SMBs, making it a crucial area for businesses to focus on as they expand their operations globally.
The report highlights the significance of market sizing in the SMB market, identifying the retail cross-border payments market for SMBs as the second-largest Total Addressable Market (TAM). To capitalize on this opportunity, finance professionals may want to consider focusing on offering technology-driven solutions, such as multi-currency, localised payment solutions that leverage emerging technologies like stablecoins and open banking. By doing so, they can cater to the diverse needs of SMBs and improve accessibility, while also lowering costs where traditional banking infrastructure is weak. Additionally, the report stresses the importance of transparency in the market, with a focus on eliminating foreign exchange markups and hidden fees that can negatively impact SMBs' margins.
