Airwallex survey: Payment issues hamper SME expansion plans

A poll of 500 business decision-makers carried out by the UK-based fintech, Airwallex,  has revealed that over three-quarters of SMEs in the UK have plans for geographical expansion next year, with more than two-thirds believing that digital adoption will be important to enable accelerated growth opportunities in 2022. 

However, pain points to progress are extensive payment fees and foreign exchange charges. The report showed that cross-border payment challenges continue to have brought significant frustrations, particularly at a time when COVID has forced many to make and manage cross-border payments.

• More than half (53%) of UK SME business decision-makers view international FX fees on cross-border payments as a pain point that takes too much effort to work around, while 26% think they are a pain point that cannot be avoided
• Over two-thirds (70%) agree the 'hidden fees' that come with dealing internationally with merchants are just a “necessary evil" of doing business across borders
• Managing payments in local currencies is also an issue: over half (58%) agree that paying international suppliers in their local currencies is a headache

More growth for UK SMEs in international markets next year

The data showed that 77% of those polled have said they plan to expand their presence in Europe and/or other international markets. 62% (six in ten) of UK SMEs plan to expand into Europe next year, and 38% have expansion plans beyond Europe.

• More than half (54%) of UK SMEs’ expansion strategies for 2022 involve sourcing new customers
• Over two-fifths (45%) are aiming to source new suppliers abroad 
• To support their growth, nearly two-fifths (43%) also plan to expand marketing activities, with the same figure opting to establish new trade partnerships in international markets

UK SMEs keen to invest in business growth

In addition to expansion plans, the survey also gauged the impact payment fees might have on UK SME growth. Over two-thirds (69%) of respondents agree that businesses that don't take steps to cut down on unnecessary fees/charges around international trade are handicapping their growth.

Indeed, the survey revealed that losses from card fees specifically could otherwise be put to better use enabling business growth:

• Three-quarters (75%) of UK SMEs would invest that freed-up budget back into their business
• One fifth (21%) would invest savings back into staffing
• 17% would opt to invest in marketing, with the same figure opting to expand the product range 
• Around one in ten (12%) would invest in facilities, e.g., office expansion

UK SMEs are embracing digital transformation

Two-thirds (66%) of UK SME business decision-makers believe that organisations that don't adapt their banking strategy for the digital age will struggle against competitors. For many, the visibility and transparency that a digital platform offers are key: 64% of respondents think businesses without a real-time view of expenses, transfers, and all other transactions to track are not firmly in control of their finances.

While 7% of respondents have already moved all or the majority of their finances away from traditional banking to manage them on a digital fintech platform, a further 68% would consider doing this in future. In fact, more than two-fifths (44%) are considering doing this within the next 12 months.

Speaking about the study findings, Jed Rose, GM, EMEA at Airwallex said, “As businesses throughout the world have been impacted by the pandemic, more innovative, tech-driven strategies are giving them the opportunity to enhance their globalisation efforts.”

He added, “Whether it is the ability to open accounts in new markets within seconds, or combining all international payments into one platform for greater control and flexibility, identifying tech platforms that can enable end-to-end solutions which support business expansion across borders can facilitate sustainable future growth for businesses of all sizes.”