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The Tough Challenges for SMEs Going Global

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The Tough Challenges for SMEs Going Global

The rise of ecommerce means that more and more small and medium sized businesses are exporting their services around the world. International expansion is now within easy reach of smaller firms, and they are taking on the challenge.

In fact, nearly half of all SMEs that were surveyed in AFEX’s State of International Payments Report said that they were looking to expand their international operations in the next year. However, of those surveyed, 26% were concerned with deciphering different payment & banking systems, 37% with the cost of international expansion, and 37% with FX volatility.

Although global markets are incredibly volatile, more businesses are taking crossborder payments. SMEs are often able to expand more quickly in overseas markets than in their domestic market, and 46% of those surveyed anticipated that they would be taking more international payments over the next year.

CEO of AFEX, Jan Vlietstra, commented that “As firms scale their business overseas, they need to be cognizant of currency exchange risks and the associated costs and the complexities involved when dealing with different banking systems. Automated payments solutions, coupled with currency exchange, FX products and expert advice, can mitigate the risks inherent in each of these challenges.”

59% of businesses depend on nonbank providers to handle their international payments, but may are now looking to expand internationally wanted to upgrade their international payment handling systems, and 28% planned to upgrade to an automated online payments system in 2017, instead of relying on bank or wire transfers. 46% want to do this to reduce processing time, 39% to reduce time delivery payments, and 33% to cut costs, although to main reason was to improve the security of their transactions.

With globalisation on the up, firms are now subject to competition from all over the world. Upgrading their payment systems can reduce costs significantly in the long run. It also improves customer experience and can increase sales to offering local payment methods.

Splinters:
· 26% were concerned with deciphering different payment & banking systems, 37% with the cost of international expansion, and 37% with FX volatility.
· 46% want to upgrade payment systems to reduce processing time, 39% to reduce time delivery payments, and 33% to cut costs,
· When expanding internationally, 26% were concerned with deciphering different payment & banking systems, 37% with the cost of international expansion, and 37% with FX volatility.

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