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How SMEs can save money and boost transparency for international supplier payments

How SMEs can save money and boost transparency for international supplier payments

International payments can be complex, and transparency is essential for efficiency, especially for SMEs. American Express can help SMEs have better control and visibility over their international payments while significantly reducing their administrative costs.

Hong Kong SMEs conduct a large proportion of business outside of Hong Kong. With a high number of foreign currency transactions, it can be difficult and time-consuming for business to deal with all the administrative and regulatory hurdles.

“Traditional banking methods mean high handling charges and lots of paper work. There are options in the market to help SMEs reduce costs,” said Professor Raymond So Wai-man, Dean of the School of Continuing Education at the Hong Kong Baptist University.

Advanced payment solutions improve not only cost efficiency, but also streamline the administrative efforts for companies. This is especially important for SMEs when they are relatively having tighter resources and manpower — but so far Hong Kong SMEs are hanging onto their old ways.

Lack of flexibility and transparency hinders cash flow

American Express commissioned East & Partners to conduct a survey of Hong Kong business on their cross border payment practices to Mainland China suppliers. The survey, titled “Navigating China’s Cross-Border Payments”*, found that companies are still clinging to traditional payment methods for cross-border transactions, with telegraphic transfers (89%), cheques (67%) and bankers draft (61%) being most popular.

The lack of flexibility and transparency of these traditional payments can hinder a company’s cash flow. There are alternatives in the market readily available to solve these problems for SMEs – such as digitized commercial payment solutions.

“There’s a generational hand-over occurring in Hong Kong SMEs, and the younger generation taking over these businesses can see right away that cheques or wire transfers are not the most efficient way to make payments,” said Professor So. “They know that electronic payments drive transparency and better enable regulatory compliance; and they’re more efficient.”

Better control and visibility brings efficiency and savings

The ‘Navigating China’s Cross-Border Payments’ survey found that almost 64% of SMEs still use manual communication methods such as fax and hard copy invoices in the payment approval process, while larger companies are rapidly embracing more technologically advanced internet-based payment solutions.

A global commercial payment service provider like American Express, can give SMEs better control and visibility over their international payments.

“In fact, there are already alternative payment solutions available to SMEs. Working with American Express, SMEs can get even greater advantages by tapping into our global network and unparalleled product solutions,” said Mr. Stephen Pendergast, Vice President and General Manager of Global Commercial Payments for Hong Kong and Taiwan at American Express.

“American Express offers a robust suite of international payment solutions that allows companies to save on expensive foreign exchange charges, and gain greater savings for their businesses when making regular payments to overseas suppliers.” continued Mr. Pendergast.

* The ‘Navigating China’s Cross-Border Payments’ survey was executed for American Express International, Inc. in Hong Kong by East & Partners Asia. The survey, included in-person or over-the-telephone interviews, was conducted in December 2016 with 454 Hong Kong enterprises with annual revenues between US$2 million to $120 million.

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