By Ryan Frere
Globalization will likely impact your business sooner rather than later. If you're skeptical about that, here are a few fun facts: According to the World Trade Organization, the global export opportunity exceeds $7 trillion; Hay Group reported in Fortune magazine's February 2015 issue that 72 percent of senior executives from the world's most admired companies indicated that globalization will have a significant impact on their organizations; and according to the International Business Education Alliance, 11.7 million U.S. jobs were supported by exports in 2014, up 1.8 million since 2009.
International trade has typically been dominated by large companies able to take advantage of their scale and reach, but thanks to digital technologies, that is no longer the case. Small and midsize enterprises (SMEs) account for the majority of companies and jobs in developed economies, and having SMEs participate in export is key to realizing this opportunity.
But SMEs face a number of obstacles going global:
Billing and payments might seem the least of concerns when going global, but in reality, getting paid by international customers can be a huge challenge. For most companies, domestic billing is easy. There are a ton of off-the-shelf software solutions, and the process is simple and straightforward: one currency, one format, and well-understood payment methods and costs. When it comes to international, the process is different. The process is far less transparent. And questions pertaining to different currencies, foreign exchange (fx) rates, fees, taxes and languages create issues in a number of areas. For example:
If your business is trying to expand internationally and you want to sell to 20 countries, you will be required to have local bank accounts and relationships in each country, not to mention the regulatory paperwork, and more. This is incredibly time consuming, and it distracts from the core business. And your current business-banking partner is probably not the solution. Fortunately, proven fintech solutions are available that can help you address these issues as you grow your international business. They enable companies of all sizes to offer their international customers a seamless, online payment experience at a fraction of the cost, while eliminating all the foreign exchange risk and reconciliation challenges typically associated with international payments.
Payments can be easily customized by country, currency and institution. Businesses can manage international receivables with 24/7 tracking for themselves and their customers and ensure that robust compliance and anti-money laundering controls are applied to every transaction.
Ryan Frere is the Vice President of Global Payments at Flywire, a company specializing in international and domestic payments and receivables. He and his team are responsible for Flywire's global collection network and he works closely with some of the top global banking institutions and payment partners in the world to take the friction out of international invoicing and payments for businesses, institutions and consumers. Ryan has more than a decade of international experience that includes localization of existing solutions and cross-border payment and receivables offerings. Ryan can be reached at email@example.com.
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