Cross-border payments enable small business survivability and optimism
New research has shown that two thirds (66%) of small businesses have experienced a growth in online sales since the start of the pandemic with three quarters (73%) of businesses confirming that global payment networks enabled their business to survive in 2020. The findings are part of Mastercard’s Borderless Payments Report, a report that looks at consumer and business cross-border payment behaviours across ten global markets.
While traditional operating methods, such as bricks and mortar retail, have been significantly affected, the rapid transformation brought about by the pandemic has also created opportunities for online business and increased cross-border trade. The shift to digital presents significant and immediate opportunities for business owners who have been able to enter new markets without a physical footprint. 68% of small business owners are now planning to do more business internationally than before the pandemic.
Countries across the globe are also using more international suppliers than they were 12 months ago. A staggering 50% of Chinese businesses state that they’re now using suppliers and services outside of China more than they were before the pandemic. With 65% of businesses stating that they will source more suppliers from across several different countries to spread future risk, cross-border payments will continue to be crucial to their future.
Stephen Grainger, executive vice president, Mastercard said: “It has never been so important to ensure safe, convenient and reliable cross border payments are in place for businesses across the world. As small business owners embrace new ways of operating in a post-pandemic world, it’s clear that fast and predictable solutions are vital to companies looking to expand into new markets. While real borders have been closed throughout the pandemic, keeping payment borders open has often allowed many small businesses to survive a challenging year –finding new markets to do business with, with new global suppliers and customers.”
The research, which surveyed businesses in the UK, UAE, Saudi Arabia, South Africa, China, Singapore, India, USA, Canada and Mexico revealed the challenges that many small businesses have faced, with reported overall earnings down by 43%. South African business owners have recorded the biggest loss (60% reduction in earnings) with the UK closely behind (52% reduction in earnings). Despite a challenging year, 55% of small business owners across the world stated that they felt optimistic about their business’ chances of recovery this year.