Wise (LSE:WISE) has completed research that concludes international banking undermines the effectiveness of small businesses to expand. A challenge that should come as no surprise to SMEs aiming to expand overseas. Wise states that “broken payments and banking technology remain a barrier to international ambitions.”
The research was commissioned by Wise and conducted by YouGov. The responses were collected betweent August 16 through September 21, 2021. Respondents include 4,835 decision makers with 500 of these SMEs coming from the United States.
Pointing specifically to US SMEs, the Wise report indicates that these small businesses see significant opportunities in expanding globally but nearly half (49%) have felt discouraged or even prevented from expanding internationally. Factors underming their expansion include the cost and complexity of international payments as indicated by 45% of respondents. This was ahead of cultural barriers (30%), lack of capital/resources (27%), and somewhat unbelievably – supply chain and logistics (29%).
Of course, Wise is on a mission to solve these solutions with a digital platform that streamlines the international transfer process – frequently at far lower fees than traditional banks and other providers.
Respondents indicated that banks and “old world” payments dominate with “70% of U.S. micro-multinationals relying on bank transfers or card payments when sending or receiving international payments yet.
Wise currently reports 11 million individual and businesses that utilize their platform to process £6 billion each month in cross border transactions. Wise is really more of a stealth bank as users can park their cash, use their Wise card and, in the UK, can generate interest while their money is idle. Wise just needs to offer this service around the world.