International sales and global suppliers key to ensure post pandemic business recovery

by uma
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  • Mastercard’s Borderless Payments Report 2022 has revealed two in five SMEs around the world worry they will never hit pre-pandemic revenue levels again, however digital growth and international sales opportunities offer a ray of hope.
  • Seven in ten (68%) are now doing more business online and 43% are doing more business overseas.
  • Six in ten (59%) also say the pandemic has allowed them to source suppliers more competitively across borders and 63% say they plan to always source suppliers globally now.
  • With this heightened focus on international sales and global suppliers, 68% said the cross-border payments network has allowed their business to survive, with 58% now making and receiving more cross-border payments than they were prior to the pandemic.

Thursday 26 May 2022 – Data from Mastercard’s 2022 Borderless Payments Report has revealed two in five (44%) global small and medium sized businesses (SMEs) fear they will never achieve the same revenue levels as before the pandemic, although online business and international sales offer a real lifeline.

The research, which covered over 3,000 small businesses from around the world, highlighted that 75% of SMEs had to make changes to their business model to survive the pandemic – with the figure reaching a high of 83% in the US – whilst 64% believe it has changed how they will do business forever. 

Whilst 44% worry about hitting their pre-pandemic revenue, the positive is this figure is down from the 54% who expressed the same sentiment in 2020. Businesses in India and Saudi Arabia feel this concern the most, whilst Brazilian and German businesses are the least worried.

The pandemic has accelerated digital transformation, with 68% of SMEs surveyed now doing more online business. This figure is higher in South Africa, Asia, the US and South America, although significantly lower in Europe and Canada. And 43% said they now do more business internationally, with over a third (37%) saying they would have folded during the pandemic if it wasn’t for these overseas opportunities. This is most likely to be the case for small businesses in Saudi Arabia, India and South Africa.

In line with these findings, 68% said the fact the global cross-border payments network kept running during the worst of the pandemic has allowed their business to survive. Over half (58%) said they are now making and receiving more cross-border payments than they were prior to the pandemic, rising significantly in India, Mexico and Brazil.

With six in ten (60%) SMEs saying international sales enabled them to grow during the pandemic, 65% saying the pandemic opened up options for new international suppliers and 63% planning to always source global suppliers going forward, it’s clear cross-border payments will be a key focus for business growth, and therefore economic recovery, moving forward. In fact, 59% say the pandemic has allowed them to source more competitive quotes from suppliers across borders and 46% say using international suppliers reduces risk.

Stephen Grainger, Executive Vice President, Mastercard said: “The unprecedented disruption introduced by the pandemic has realigned global economics, with many of the world’s SMEs looking keenly towards prospects in new markets. With small businesses growing their international customer and supplier networks at pace, especially online, it’s crucial that financial institutions have the right cross-border solutions in place to support them.

“Cross-border payment systems must become faster, cheaper and more secure. Through a single point of access, Mastercard Cross-Border Services allows businesses to send and receive money safely and with the certainty they crave.”

Despite the importance of cross-border payments, there are clearly still frustrations for businesses. Four in ten (39%) say they slow down the supply chain at present, and a similar proportion (36%) say there is no transparency about how much money is lost in foreign exchange and transfer fees.

Through partnerships with financial institutions around the world, Mastercard is empowering every business to address these issues and improve cross-border payments for both businesses and individuals. Mastercard Cross-Border Services allow people and businesses to send and receive money securely, and with upfront visibility of timings and fees to provide people and businesses with more confidence and predictability.

Mastercard’s Small Business Digital Acceleration Program also delivers new services, education and resources to help small business digitally transform. These tools enable small businesses to quickly establish an online presence, protect their business against cyber threats, understand how to market in the digital space and more.

The full Mastercard Borderless Payments Report 2022 is available at: https://www.mastercard.com/news/borderlesspayments

 

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