SMBs turn to cross-border payments tech.

Technology, and the great digital shift, has made it easier to tap into new markets of all sizes, across all verticals.

Globally.

But as B2B changes, and as suppliers and buyers connect across new time zones and trade in different currencies, the reality of rising interest rates means technology must fill another need: helping companies, especially smaller ones, scale faster. Changing foreign exchange rates.

There is an urgent situation, especially in companies with inflated payment rates. In many cases, they still rely on manual processes, data entry and spreadsheets – in short, the human touch – to deal with the daily flow of foreign exchange.

Manual processes leave room for error

But there is room for error or delay in doing so. Central banks are scrambling to raise interest rates and tackle rising inflation. Many banks are following the US Federal Reserve’s lead, and the Fed has shown no sign of slowing its approach, with a whopping 75 basis point hike normalized. As the US dollar rises, many currencies (the British pound is one example) are depreciating.

For enterprises looking for a way to increase margins, they need a second (and in some cases, maybe a third) look at reducing manual tasks and automating FX management and cross-border payments.

In a recent interview with Karen Webster, Kat Moore, Head of EMEA Payments Solutions for JP Morgan Chase Commercial Bank, noted that corporate clients want visibility into their “whole payment picture” and how they can optimize their payables and receivables. Without real-time insight into cash positions, treasurers and other financial professionals lack the ability to make sound investment decisions to mitigate the volatility of foreign exchange (FX) rates.

PYMNTS data recognizes that financial institutions (FIs) have a vast opportunity to serve their enterprise customers, the greenfield potential is high, but the execution leaves room for improvement. According to a recent issue of “B2B Border Payments,” a partnership between PYMNTS and American Express, nearly two-thirds of FI executives say their cross-border payment solutions are effective in solving cross-border pain points experienced by SMBs, leaving 37% saying those solutions are less than effective. .

But FIs — and their smaller clients — are embracing the advanced technology needed to improve those jobs. Application Programming Interfaces (APIs) help streamline and automate communication flows between corporate back ends and boundaries between FIs, reducing friction-filled manual moves. Interoperability and standardization can help companies effectively see and mitigate the impact of rapid change rates. PYMNTS found that 56 percent of all U.S. businesses see improved cash management capabilities as a benefit of cross-border payment solutions.

There is a growing awareness of the benefits of technology for small businesses to increase margins. As the chart below shows, most companies expect better cash management and reduced costs to be key benefits of cross-border innovations.

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