Consumer & Commercial Payments
August 30, 2024
Cross-border payments, the lifeblood of global commerce, are also an Achilles heel for most economies globally—both emerging and developed. This vulnerability is no better exemplified than by the failure of the finance and payments industry to resolve the challenges of its most underappreciated and undervalued segment: SMEs.
Our latest white paper, User Reality vs. Industry Fallacy, focuses on the plight of small and medium-sized enterprises as they struggle to grow and trade internationally. Numbering more than 330 million worldwide, SMEs’ needs continue to be.
Why read this paper?
Below, we set out three of the most interesting takeaways from the paper to whet the appetite of industry stakeholders. Other critical topics explored within the paper but not illustrated here include why CBDCs are not the answer, how much should be learned from the consumer payments world, and why correspondent banks have not lost the battle yet.
High on SMEs’ wish lists, we also delve into areas including the need to deliver flexible payment destinations and mass/bulk payments, identifying the status of a payment and delivery confirmation, and transaction reporting. Now, on to the appetizer….
Optically, SMEs’ lowly 7% share of cross-border B2B volumes suggests that they are an unimportant segment. This is wrong. As a share of revenues, this proportion skyrockets to 40%.
Another way of highlighting this misconception, as Mastercard data shows, is to understand the spending and revenue generation of SMEs – a $50 trillion annual spending pot. Address these needs, and the upside for all stakeholders is clear. SMEs can easily be more profitable payments customers than consumer payments.
More than one third of SMEs globally have experienced issues leading to late or failed payment. The majority of these are addressable with existing or emerging technologies. These delays and failures deprive SMEs of billions of dollars of liquidity annually.
SMEs are vital for social and economic change, and this applies as equally to all developed as well as developing and emerging economies. Employment in the EU, for example, is more than two-thirds skewed to SMEs.
Only 40% of businesses are paid on time, but these easily avoidable delays cause at least a quarter of all bankruptcies.
Download, digest & debate
The paper’s interactive format, with video interview excerpts and links to useful data and other reading, ensure that the topics introduced are only the start of this debate.
To explore the many opportunities and solutions that software and technology are creating on a daily basis, download, digest and debate ‘User Reality vs. Industry Fallacy’. Join this debate, hear and see the experts discuss what matters and why and enter a world of relevant opinion and data.
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