Infographic: 77% of UK businesses plan to expand their international presence in 2022, according to poll
An Airwallex poll of UK small and medium-sized enterprises (SMEs) has found that more than three quarters plan to expand their international presence in 2022. But international currency exchange fees threaten to hamper growth.
Airwallex surveyed 500 business decision-makers and found that 63% plan to expand their footprint on the continent next year, whilst 38% have plans beyond Europe.
More than half of those surveyed want to grow their customer base outside the UK, whilst over two-fifths are planning to source new suppliers abroad.
To support their growth, 43% of businesses will begin overseas marketing activities and establish new global trading partnerships.
International transfer fees are a pain point for businesses
Global expansion can present challenges when it comes to cross border payments. Traditional banks charge up to 3.5% for currency exchange, that’s in addition to fees of up to 2.95% for non-GBP transactions.
Businesses who trade internationally risk falling foul of double currency conversions—being charged once when they pay foreign suppliers, then a second time in reverse when they sell their products overseas.
Whilst SMEs acknowledge that cross-border fees are a pain point, more than half of those surveyed believe it takes too much effort to get around them, and 26% believe they cannot be avoided. 77% were resigned to the additional charges, agreeing that hidden fees are a “necessary evil” that is part and parcel of doing business across borders.
Despite this, over two-thirds agree that businesses that fail to take action to reduce the fees associated with global trade risk stunting their growth. 75% said that the money wasted on international transfer fees could be better invested in other areas such as marketing and headcount.
Digital adoption essential for accelerated international growth
The study drew attention to the role that technology will play in enabling UK organisations to expand overseas, particularly in regards to financial management.
66% of SMEs believe that companies that fail to adapt their banking strategy for the digital age will struggle to keep up with competitors. And the majority feel that organisations that don’t have a real-time overview of their expenses, transactions and transfers are not in control of their finances.
To manage finances efficiently, many businesses are planning to move away from traditional banks towards a FinTech solution. 44% are planning to switch account providers within the next 12 months, 7% have already switched, and 68% would consider doing so in future.
Jed Rose, GM, EMEA at Airwallex said, “As businesses throughout the world have been impacted by the pandemic, more innovative, tech-driven strategies are giving them the opportunity to enhance their globalisation efforts.
“Whether it is the ability to open accounts in new markets within seconds, or combining all international payments into one platform for greater control and flexibility, identifying tech platforms that can enable end-to-end solutions which support business growth across borders can facilitate sustainable future growth for businesses of all sizes.”
Infographic of key report findings
Businesses benefit from zero international transfer fees when they switch to Airwallex
By opening a multi-currency business account with Airwallex, organisations can avoid international transfer fees altogether, no matter how much they send or how frequently.
Thomas Adams is the CEO of Brandbassador and an Airwallex customer. “We used to pay Stripe between $5,000 and $10,000 a month in conversion fees because most of our customers pay in dollars,” says Thomas, “now we funnel that money into our Airwallex US dollar account, we don’t have to pay commission. We’ve saved more than $100,000 so far this year.”
Airwallex supports SMEs as they grow, both domestically and internationally. As well as eliminating the cost of international money transfer fees, the platform allows businesses to track transactions easily, even when dealing in multiple currencies.
Airwallex’s digital-first solutions range from online payment links to borderless virtual cards, allowing businesses to manage every step of their financial journey, from collecting money to paying expenses, from one account.
As UK businesses move towards a global future, Airwallex can help them manage their money more efficiently and cost-effectively. If you’re interested in opening a business account with us, you can sign up online today or get in touch for a demo.
Tilly manages the content strategy for Airwallex. She specialises in content that supports businesses in their growth trajectory.