One of the fastest-growing business segments is the small and medium-sized enterprise (SME) sector. In 2014 David Cameron himself stated the importance of SMEs to the UK, calling them the ‘lifeblood’ of the British economy. According to most business analysts and observers, globalisation presents the biggest opportunity for growth for these SMEs. Experts and observers have also identified the biggest challenge facing SMEs; globalisation.
SMEs face a number of unique challenges. Cash flow is a major concern for most SMEs. Many new businesses are self-capitalised or launched with the help of private investment, which in many cases is friends and family. These new SMEs, and in fact the most established ones, usually operate on very small margins for at least the first few years of their existence.
In the global marketplace it is common for customers, especially the larger ones, to impose lengthy payment terms for suppliers. For larger companies this is not as big an issue in part due to the tools at their disposal and their relationship with banks. Banks in the UK have been reluctant to work with SMEs in terms of financing. Additionally, the basic structure of banks can create problems for companies operating on small margins. Fees for a number of services can be high and SMEs do not usually have the financial clout, the experience, or the manpower to work with bank officers to secure the best rates and services for their business.
More than half of SMEs say that currency exchange volatility is a major concern. Most do business in an average of about three countries. As their international footprint increases, the need to develop a better understanding of how to send and receive international payments efficiently and easily is crucial on both a cash flow and manpower level.
The majority of SMEs report that they spend an average of eight hours per month dealing with international payment issues.
On the cash flow front, traditional banking procedures are the basis of a lot of the problems. Fees, which average about £15 to £30 per transaction along with unfavourable foreign exchange rates and FX fees, add a significant percentage to the cost of doing business.
SME consultants and business analysts increasingly encourage business owners to look towards alternative methods, such as TransferGo, to handle their international currency transactions.
The co-founders and officers of TransferGo are well aware of the problems presented by traditional banks when dealing with international transactions. As the former owners of an import-export concern, they once had a bank send payment to the wrong country and in the wrong currency. Third party processing options proved to be little better, especially once transaction fees, which were often as high as 29 per cent were included. They also realised that SMEs needed a way to conduct business on the go and in an almost instantaneous manner.
TransferGo’s goal was simple; provide a solution for SMEs doing business internationally that was fast, convenient, and inexpensive.
TransferGo developed partnerships with banks in over 30 countries to implement their ‘local in – local out’ strategy. Payments are made in the payee’s local currency to a local account; those receiving funds are paid in their local currency from the TransferGo partner bank account in their country. The transaction is fast, secure, and conforms to all banking and money transfer regulations.
TransferGo’s business customers enjoy an easy, convenient method of receiving and making international payments and have used the service to make purchases, pay international staff and business expenses and build international business relationships. The fact that the service is far less expensive and much faster than similar services offered by banks and the more traditional institutions addresses the most pressing concern for SMEs, cash flow, head-on.
See also: Global payment services for small businesses – how to avoid higher fees
