FEATURE: CROSS-BORDER PAYMENTS
• Key markets for expansion: Mexico and Brazil – 75 % of SMEs plan more global partnerships
A system designed for large corporations
The Mastercard study confirms what many SME owners already know: the current cross-border payment system was designed with large corporations in mind. As such, it often fails SMEs on the basics – speed, cost-efficiency and transparency.
Top Three Cross-Border Pain Points for SMEs
1. Slow payments: 40 % take over four days; 20 % exceed 10 days
2. High costs: Fees can exceed 30 % for low- value transfers
3. Lack of transparency: Hidden FX conversions and unclear timelines erode trust
Why banks risk losing ground
Among the study’ s findings:
• Delays are the norm, not the exception. Forty percent of transactions take more than four days to arrive and nearly 20 % take more than 10 days
• Costs are disproportionately high for small transactions. Sending just US $ 250 can incur fees averaging 23.3 %, with some corridors reaching 30 %
• Foreign exchange practices add hidden costs. Around 90 % of transactions( excluding those to the US) are converted into local currency without the SME’ s consent, often at unfavourable rates
• Failure rates are significant. In some cases, such as payments from Brazil, 11 % of transactions fail outright
These inefficiencies are not just an annoyance, the study says. For SMEs, where cash flow is often tight and working capital windows are short, waiting more than a week for a payment to clear can disrupt operations, damage supplier relationships and cause them to miss growth opportunities.
Despite these issues, banks still handle 75 % of crossborder payment flows for SMEs, the study says. They enjoy strong relationships with their clients and hold a trusted position in financial decision-making. But if they fail to adapt, that dominance is under threat.
WE ARE REIMAGINING HOW INTERNATIONAL
PAYMENTS SHOULD WORK FOR SMES: SIMPLY, SECURELY AND ADAPTED
TO THEIR REALITIES.
www. intelligentcio. com INTELLIGENTCIO LATAM 25