U.K. fintech company MB Transfers, which enables cross-border B2B payments, is going by a new name: ArcaPay. It’s part of the company’s effort to refocus on digitization, CEO Marius Bausys said in the company’s announcement earlier this month. The rebrand also comes with new efforts to help SMEs succeed through a consulting service.
The strategic moves, ArcaPay explained, are in response to small businesses needing more attention and specialized services that they aren’t getting from their banks. PYMNTS spoke with Bausys to get his insights into the struggles SMEs face when dealing with international B2B payments, the technologies helping them overcome their challenges and what’s ahead for this industry as government initiatives like Faster Payments and SEPA take shape in the B2B payment world.
Getting SMEs On Board
“Small businesses face a lot of similar challenges as their larger competitors,” Bausys said of the motivation behind launching an SME consulting service. “However, they typically do not have access to support and intelligence that more established companies benefit from.”
This leaves an opening in the market, he added, for financial service providers to help small businesses “better understand their transaction flows, timing of payments, impact from developments in the financial markets” and so on, the executive said.
While Brexit is seen as having only a minimal impact on the global markets (so far), Bausys said the decision for the U.K. to leave the European Union is an example of how SMEs can be behind large rivals when it comes to dealing with socioeconomic events.
“How exchange rate fluctuations, new international trade arrangements, change in the monetary policy and other factors will affect their business are big unknowns,” he stated.
Payments Acceleration
But there are other regulations and economic policies that can give small businesses a leg up on managing payments and finances. Faster Payments in the U.K. and SEPA across the EU are two examples and offer the platform over which ArcaPay processes transactions. The company uses the interbanking system to facilitate cross-border B2B payments for its clients.
These efforts, Bausys said, enable SMEs and larger businesses to gain greater visibility into their cash flows.
“I believe we are gradually approaching real-time settlement of international payments,” he said. “Regulators and more innovative market participants see this as an achievable goal and are willing to put effort to achieve it.”
“There is certainly some resistance from incumbents,” he continued, “but nonetheless, it is only a matter of time until we get there.”
An ecosystem in which regulators and industry innovators both work towards a common goal of streamlining and accelerating payments can be most effective, said Bausys. Having this dual-sided effort enables the companies that develop innovative tools to more easily connect into existing national networks — and more affordably, he added. That affordability is then passed on to the end user.
While the payments space may be progressing towards faster and cheaper payments, even for international transactions, Bausys said that there remain some companies that are behind the times in their own B2B payments operations. He added that, at least when it comes to ArcaPay’s clients, businesses eager to adopt newer payments technologies and businesses more reluctant to leave behind well-ingrained processes are pretty even-sided.
But for those companies that are ready to take that leap and change out legacy systems, their reasons for doing so differ.
“Larger businesses are looking for automated solutions that can save time, reduce scope for human error and easily integrate with their accounting systems,” he explained. “Meanwhile, smaller businesses are primarily focused on driving down transaction costs because they do not get a good deal from their bank. They want a simple-to-use system that enables quick international payments at a low cost.”