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Education

Overcoming international business

complexities for SMBs

By Ryan Frere peding their growth.
Flywire • Reconciliation: Short payments resulting from hid-
den fx fees, manual errors and the lack of transpar-
lobalization will likely impact your business ency increase operational costs and impact custom-
sooner rather than later. If you're skeptical er satisfaction.
about that, here are a few fun facts: According
G to the World Trade Organization, the glob- • Cost: Companies processing either large sums or
al export opportunity exceeds $7 trillion; Hay Group numbers of international receivables may be paying
much more than they should for these transactions
reported in Fortune magazine's February 2015 issue that
72 percent of senior executives from the world's most due to hidden fees and unpredictability around for-
eign exchange.
admired companies indicated that globalization will have
a significant impact on their organizations; and according • Complexity: There are many region-specific chal-
to the International Business Education Alliance, 11.7 mil- lenges related to international payments from mar-
lion U.S. jobs were supported by exports in 2014, up 1.8 kets where you may not have a preferred banking
million since 2009.. relationship or agent in place. This can make it hard-
er and costlier to do business there.
Not the exclusive domain of big business
• Compliance: There are also important compliance
International trade has typically been dominated by large and anti-money-laundering considerations that
companies able to take advantage of their scale and reach, need to be taken into consideration in different re-
but thanks to digital technologies, that is no longer the gions.
case. Small and midsize enterprises (SMEs) account for the
majority of companies and jobs in developed economies, Customized, fintech solutions
and having SMEs participate in export is key to realizing If your business is trying to expand internationally and
this opportunity. you want to sell to 20 countries, you will be required to
have local bank accounts and relationships in each coun-
But SMEs face a number of obstacles going global: try, not to mention the regulatory paperwork, and more.
• Difficulties accessing export distribution channels This is incredibly time consuming, and it distracts from
and in contacting overseas customers the core business. And your current business-banking
• Costly product standards and certification proce- partner is probably not the solution. Fortunately, proven
fintech solutions are available that can help you address
dures and a lack of information about specific re-
quirements in the foreign country these issues as you grow your international business.
They enable companies of all sizes to offer their interna-
• Unfamiliar and burdensome customs and bureau- tional customers a seamless, online payment experience
cratic procedures at a fraction of the cost, while eliminating all the foreign
• Poor access to finance and slow payment mecha- exchange risk and reconciliation challenges typically as-
nisms sociated with international payments.
International billing and payment Payments can be easily customized by country, currency
and institution. Businesses can manage international
Billing and payments might seem the least of concerns receivables with 24/7 tracking for themselves and their
when going global, but in reality, getting paid by customers and ensure that robust compliance and
international customers can be a huge challenge. For most anti-money laundering controls are applied to every
companies, domestic billing is easy. There are a ton of off- transaction.
the-shelf software solutions, and the process is simple
and straightforward: one currency, one format, and well- Ryan Frere is the Vice President of Global Payments at Flywire, a compa-
understood payment methods and costs. When it comes ny specializing in international and domestic payments and receivables.
to international, the process is different. The process is far He and his team are responsible for Flywire's global collection network
less transparent. And questions pertaining to different and he works closely with some of the top global banking institutions
currencies, foreign exchange (fx) rates, fees, taxes and and payment partners in the world to take the friction out of interna-
languages create issues in a number of areas. For example: tional invoicing and payments for businesses, institutions and con-
• Days sales outstanding: International payment sumers. Ryan has more than a decade of international experience that
processing can be very slow, negatively impacting includes localization of existing solutions and cross-border payment and
cash flow, putting a strain on businesses, and im- receivables offerings. Ryan can be reached at ryan@flywire.com.

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