Opportunity in convenience: breaking payments barriers for businesses and consumers

credit: Shutterstock
credit: Shutterstock

Convenience is a highly valued feature of modern trading and e-commerce. The importance of this is paramount to both consumers and businesses, making the payments and customer journeys significantly smoother.

Demonstrating the significance of simplicity to business when it comes to payments, a survey by Visa’s Currencycloud solution has found that 34% of UK SMEs do not engage in international trade due to a lack of convenience.

The firm’s survey of 500 SMEs revealed that over a third said that they were not involved in exporting due to concerns about the complexity of making and receiving international payments.

Within this segment of surveyed SMEs, 51% cited exposure to currency fluctuations and foreign exchange risks, 49% were concerned about payments security, 45% were concerned about the speed of payments and 43% cited the payments costs as being a barrier.

international payments are a key concern for businesses looking to export overseas

Piers Marais

Innovation is one of the big buzzwords in fintech, and 2023 and early 2024 have seen this word used more times than can be counted. Fostering innovation is an objective of fintechs, banks, governments and trade associations – the UK’s Digital Securities Sandbox (DSS) being an example of some efforts. 

Based on Currencycloud’s research, perhaps developing more convenient ways for UK SMEs to engage in international payments could be a key area for some to focus on.

“These figures show that international payments are a key concern for businesses looking to export overseas,” said Currencycloud’s Head of Product, Piers Marais.

“However, it’s also clear that there’s a growing appetite to export and that banks are in a key position to support SMEs. So, we need to move away from the standard ‘banks vs fintechs’ rhetoric and focus more on how the industry can collaborate.”

It is important to note that payments are not the only concern SMEs have when it comes to international trade, however. The survey found that 31% of SMEs were concerned about finding overseas customers, and 29% cited tariffs and ‘other charges’ a barrier.

“It’s also clear that if the government wants to boost Britain’s global business ambitions, it needs to take concerns around red tape, customs, and tariffs seriously,” Marais continued.

According to Currencycloud, 49% of SMEs are currently not involved in exporting. However, 46% of those that are exporting use a high street bank or building society to receive and send payments 

Additionally, 34% tried to access support with exporting from said banks, second only to the government, particularly the Department for Business and Trade. Helping SMEs find convenient ways to pay may be a key opportunity for the UK banking sector.

We’re seeing a significant shift towards greater convenience in the finance industry

Nick Black

It is of course not just businesses that are looking for the smoothest ways to pay, however. Consumers are just as likely, if not more likely, to want to reduce friction and increase convenience in the payments journey.

Recent research from GoDaddy showed that whilst millennials and Gen Z are the ‘top target audiences’ for SMEs, many of these businesses are not offering convenient enough ways to pay for these demographics.

Despite this, according to a separate survey by Bankrate, customers are optimistic about the increasing convenience of financial services. The survey found that 79% of respondents agreed that digital innovations are making banking services more accessible.

The importance of maintaining this was still evident though – 71% of customers said that they preferred to manage bank accounts through a mobile app or computer, showing the modern consumers’ penchant for easy and flexible access to banking and financial services.

“We’re seeing a significant shift towards greater convenience in the finance industry,” said Nick Black, COO Apadmi, a mobile app and web developer. “Users expect to be able to do things quickly and easily wherever they are, and finance is no different. 

“Mobile apps have enabled customers to engage with many financial services from the palm of their hands – whether that’s opening accounts, monitoring transactions, credit cards, foreign exchange or managing portfolios. Apps have made it easier to bank than ever before.”

Payment Expert Analysis: Keeping up with consumer demands is the bread and butter for all businesses. For banks and financial services, ensuring a convenient payment method is a clear way to stand out from the competition in an industry constantly driven forward by innovation and technology.