Why Cross-Border Payments Have Gone From Occasional to Routine for SMEs

Quick Summary

Pratik Khowala, Executive Vice President, Global Head of Transfer Solutions at Mastercard, explains why cross-border payments have shifted from an occasional event to a routine part of running a small business. His answer starts at the macro level: globalisation, with 57% of US SMEs now buying goods and services from overseas, and the effect is felt hardest by businesses with the least spare liquidity.

What is driving the shift from occasional to routine cross-border payments?

Khowala points to globalisation as the macro driver. SMEs are no longer transacting only in their domestic market; they increasingly have customers and suppliers overseas. In the US alone, 57% of SMEs are buying goods and services from overseas, and he says similar import and export volumes are showing up in other geographies too, a pattern that used to be the preserve of large-scale industry.

Why does this matter more for SMEs than large corporates?

Large corporates typically have significant liquidity and access to more of it; small businesses do not, and live by every day. Every day that a cross-border payment takes to arrive is a day of lost opportunity to produce and sell more, which is why simplifying cross-border money movement matters disproportionately for smaller businesses.

FF NEWS TAKE:

57% of US SMEs buying from overseas is the kind of number that turns cross-border payments from a treasury afterthought into core plumbing. Khowala's framing, that liquidity trapped in transit costs an SME more than it costs a multinational, is the clearest articulation yet of why speed and trust are polling ahead of cost in Mastercard's own research.