Old-fashioned payments processes impact the cost of doing business
A new study from international payments engine Currency Cloud, reveals the majority of US businesses continue to battle major innovation hurdles when moving money across borders.
Through a survey of US and UK finance professionals, Currency Cloud found the US has a lot to learn from its UK counterparts when it comes to international payments, with nearly half (47%) of US businesses still relying on old-fashioned paper checks. In contrast, the majority of UK businesses (70%) make international payments electronically.
Mike Laven, CEO, Currency Cloud, notes US businesses will need to adapt to remain competitive in the global On Demand economy: “We are experiencing a tech-enabled revolution which is spawning the On Demand economy. Consumers already benefit with near real-time services such as Uber, GrubHub and Etsy. In this context, it is imperative businesses implement solutions that allow them to remain agile in order to compete. It’s surprising to see that while consumers are adopting payment technologies such as Venmo and Xoom, the vast majority of US businesses still rely on paper checks for international payments.”
Unsurprisingly, 37% of US businesses cite slow transaction times as a key pain point in processing international payments.
The average processing time for international payments for US businesses is two days, although many respondents say it normally takes three-to-five days. Only 22% of international payments coming from the US are processed immediately. Compounded by the fact that nearly half of all American businesses pay with paper check, lag time is further exacerbated on the payee’s end.
Small businesses are even more impacted. Despite the increased need to be competitive and innovative in today’s market, the survey results show that 60% of companies with under 100 employees rely on paper checks – well above the 47% average.