We know that in this day and age the user experience is king and you choose to work with certain partners for your business based on how seamless and simplified the experience is -- along with what it means for your bottom line.
When it comes to international payments small businesses are traditionally forced to rely on financial institutions (FI’s) for their international business needs, which creates a multitude of challenges in both the short and long-term. FI’s do not always prioritize the user experience and often provide one that is considered subpar. On top of this, working with institutions is expensive, can expose businesses to market volatility, and their lack of transparency in the transfer process creates data gaps that lead to the inability for small businesses to manage cash flow effectively.
Traditionally, small business customers accepted the status quo of what institutions offer them to marginally grow their business and gain access to new and emerging channels across international marketplaces. Thankfully, this is where fintech’s and third-party platform providers now come into play.
With the emergence of all different types of financial tech companies entering the category at an alarming speed, small businesses, and consumers for that matter, are no longer forced to use FI’s solely to do business or send money overseas. New and emerging technologies in the international payments space have opened borders allowing businesses to no longer rely on this traditional and overly expensive way of doing business to support revenue forecasts. Companies now have more choice and flexibility on how to better manage their business.
Many of these alternative solution providers can enable and facilitate, through API integration, reduced costs, data transparency, speed to market, and the ability to offer the level of customer service and customization that their consumers are demanding from them.
The benefits of working with fintech’s far outweigh those of FI’s when it comes to growing small businesses across borders:
Tech companies can provide efficient and transparent payment options for foreign customers
To grow transaction volume small businesses must be able to accept many different payment types from their customers and vendors like pre-authorized debits, wires, EFT’s, credit cards, and also adapt next-generation digital payment solutions like mobile wallet payments that banks can’t offer them.
Thankfully with fintech’s, mobile payment processing solutions are as easy as a plug-and-pay option through an API integration instantly enabling businesses to be able to accept payment from customers and pay suppliers in alternative and vendor preferred methods.
Fintech’s can ensure that payments to your cross-border suppliers arrive on time, freeing up business capital
You can execute foreign exchange payments through a bank but be prepared for additional foreign exchange fees (up to 5%) along with accepting exchange rates effective at the time of the transaction.
As a small business in Canada, you do not have the infrastructure for foreign exchange currency risk management. You are, therefore, at the mercy of exchange rates and bank transaction fees.
International money transfers, overseas payment acceptance, and foreign exchange services powered by fintech’s can cut down on costly bank fees and protect your business against market volatility with additional offerings of innovative risk management strategies and solutions that are more competitive than what the banks can offer.
Tech solutions remove the need for manual intervention
Small businesses can save on accounting costs by using fintech solutions. Accounting tech solutions can help small business owners keep track of personal and business taxes, expenses, payroll and contractor payments, deductions and more. With even more experienced solutions from some fintech’s in the space, like MTFX, businesses can even receive an all-in-one solution set that includes direct international payment integration into businesses ERP and AR systems, removing the need for any manual intervention when it comes to payment reconciliation saving even more time and money.
Fintech’s can reduce the number of payment failures, which result from inaccurate data input and beneficiary information gaps
Another major benefit from alternative payment technologies is that they can provide your business with rich insights into your customers. When it comes to forecasting and managing cash flow, fintech’s can fill in the data gaps that exists with traditional banks and institutions so you can manage your business and your customers information more efficiently. Fintech companies operating in the international money transfer space use encryption to safeguard user data and follow legal requirements and regulations to keep customer finances safe. They can also fill in data gaps that occur when using traditional methods so businesses can monitor transfer status in real-time while taking more control of business forecasting and cash flow.
Banks are no longer the only players in the international payments game. Fintech’s are now the ones meeting the demands of customers by providing options, transparency, customization and an overall better user experience.
Learn more about how a third-party payment platform can help you retain your local customers and expand your international business. Contact one of our market experts at MTFX and we will show you how foreign exchange currency risk management can protect your business while increasing profits.
Open an account with MTFX today and start enjoying fast, cost-effective, and convenient international money transfers.
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