Where SMEs Are Still Being Let Down on Cross-Border Payments: Mastercard

Quick Summary

Pratik Khowala, Executive Vice President, Global Head of Transfer Solutions at Mastercard, says SMEs deserve the same standard of cross-border service that large corporates already get. The biggest gap is speed: correspondent banking can take three to seven days, trapping liquidity SMEs cannot afford to lose. Cost, he argues, matters less than the price of that delay.

Where are SMEs being let down most: cost, speed, FX or transparency?

Khowala reframes the question: it is less that SMEs are "let down" and more that they could be served as well as large corporates already are across all four vectors. The biggest issue, he says, is speed. Moving money through the correspondent banking network can take three, four, even seven days, which he calls "a lot of liquidity trapped."

Why does transparency matter alongside speed?

Transparency matters because an SME has to tell its supplier the money is on its way so the supplier will release goods. Assurance that a payment has actually been sent makes the trade itself move more smoothly.

Where does cost fit in?

Cost still matters, but Khowala says SMEs are weighing it against the cost of trapped liquidity and the cost of FX, and prioritising transparency and speed in that bigger picture. "It's not that it's not important," he says, "it's just less important."

FF NEWS TAKE:

A seven-day wait through correspondent banking is not a rounding error for an SME operating on thin working capital, it is a genuine constraint on how much stock they can move. Khowala's argument that trapped liquidity is the real cost, not the headline FX rate, is a useful reframe for any provider still leading with price in its SME pitch.