Technology for MSMEs: As technology helps small and medium enterprises (SMEs) to evolve and transact with customers in various countries, the importance of having a smooth payment experience has gained significance. Consequently, security, transparency and payment process integration followed by trust and traceability have become the key drivers for SMEs in choosing an international payment provider, said a research by Swift (Society for Worldwide Interbank Financial Telecommunication).
Swift is a member-owned cooperative headquartered in Belgium providing financial messaging services to banks and financial institutions globally.
For SMEs, payment process integration is referred to enabling them to send cross-border payments directly from the software they frequently use such as payroll or ERP. “With this in mind, developing direct or indirect relationships with accounting or cashflow software providers could allow (payment) players in this market to power SMEs’ payments in the background and serve the needs of these businesses,” the research report said.
The research, focusing on low-value cross-border payments, surveyed 4,205 consumers and 2,720 SMEs across eight key markets — Australia, China, Germany, India, Saudi Arabia, South Africa, the UK and the US.
The other factors cited by SMEs in the survey helping them decide on the cross-border payment provider were speed of transactions, support offered, ease of use, and foreign exchange. Fees charged and promotions were the bottom two drivers.
Importantly, the vast majority – 97 per cent of SMEs – said they were happy with the payment provider they currently used, with little variation between those who used a bank vs a non-bank provider. But despite the high satisfaction rate, respondents expressed some curiosity about what else might be on offer, with 75 per cent saying they would consider using an alternative.
Out of the eight markets surveyed, SMEs in India were among the most satisfied customers with their preferred payment providers. The research showed that 98 per cent of Indian SMEs surveyed were satisfied including 63 per cent very satisfied and 35 per cent quite satisfied. Only 2 per cent were neither satisfied nor dissatisfied.
Also read: Leap-frogging India’s SMEs into the global fold: Low-value cross-border payment
However, SMEs worldwide may look at more than one payment provider if they can transact faster with more ease of use at lower fees. Further transparency on all fees charged and the final amount delivered, a better foreign exchange rate, etc., were other motivations cited by SMEs for using additional providers.
Meanwhile, hidden fees, lack of clarity on exchange rates, payment delivery failure, inability to track payment, problems accessing direct support or help, etc., were the top reasons for SMEs to leave a payment provider.
The global spend on cross-border (B2B) payments is expected to surpass $40 trillion by the end of 2024; increasing from $37 trillion in 2022, a whitepaper earlier this year by digital technology market research firm Juniper Research had said. 9 per cent ($3 trillion) of this growth will be driven by the rising popularity of e-commerce marketplaces, where e-commerce merchants are based in international locations selling goods internationally via local e-commerce platforms.