37% of FIs Still Struggling to Solve SMBs’ Cross-Border Payment Woes

Financial institutions (FIs) are struggling to give small- to medium-sized businesses (SMBs) the same level of service they offer to larger companies. 

In fact, 37% of FI executives said their digital payment solutions are only slightly or not at all effective in addressing the B2B frictions faced by SMBs, according to the August/September edition of “B2B Cross-Border Payments,” a PYMNTS and American Express collaboration. 

Get the report: B2B Cross-Border Payments 

That figure is in stark contrast to those for larger firms, as just 19% of the FI executives said they don’t have effective solutions for middle-market companies and 3% said the same of large enterprises. 

Cross-Border Payments are Especially Difficult 

For many SMBs, B2B cross-border payments are especially difficult. In fact, 27% of them said the complexity of such transactions is a top obstacle. 

Businesses said they are looking for cross-border payments solutions that will reduce fraud risk, enhance cash management capabilities, reduce errors, improve accounts receivable (AR) efficiency and provide access to new products and services. 

Bob Binford, executive vice president at Unique Carpets Ltd., an importer of wool carpets, told PYMNTS that when selecting a partner for B2B cross-border payments, he looks for simplicity and ease, safety and security, and a solution-oriented mindset. 

Learn more: Global Businesses Seek Fresh Efficiencies, Solid Partners to Upgrade Cross-Border B2B 

“Put simply, we need to pay our suppliers on time and efficiently,” Binford said. “We don’t need a payments solution that overcomplicates the transaction process. We just need the funds to get where they need to be in a timely and easy manner.” 

Looking for Bundles 

Most FIs are willing to bring in new technology in order to provide that kind of service to business customers, PYMNTS research found. 

In fact, in a survey of executives in charge of treasury services or wholesale banking at FIs, 64% said they are very or extremely willing to adopt new technology to solve businesses’ pain points in cross-border payments. 

One fact FIs should remember when seeking such solutions is that their SMB customers want a solution that is not complex.

American Express — which recently launched a digital solution called Global Pay that lets U.S. businesses make secure domestic and international B2B payments — found in a survey that 40% of SMBs said an ideal solution for cross-border payments would bundle multiple financial services products under a single provider. 

See also: Amex Launches Global Pay for Cross-Border Payments 

“Businesses expect and need the ability to make seamless cross-border payments in a way that is fast, clear and straightforward,” American Express Vice President of Cross-Border B2B Products Olann Kerrison told PYMNTS. “While larger companies have long had access to cross-border payments solutions, we heard from small and mid-sized businesses in particular that they needed a cross-border solution designed for their size of business that does not require a significant technology uplift.” 

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