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Small and medium-sized businesses (SMBs) are, as their name suggests, small, but they are widely considered the backbone of the U.S. economy in many ways. You might be surprised to learn that SMBs account for a staggering 99.9% of all businesses in the U.S. This means that most business owners and entrepreneurs are relevant in any and all discussions surrounding SMBs. These small but mighty businesses have a massive impact on employment and revenue in our country, and it's important to understand how they engage with the rest of the world.
Industries are evolving and modernizing at the speed of light. As markets grow increasingly interconnected, SMBs find themselves facing challenges of increased complexity and, unfortunately, a slow evolution from traditional financial institutions.
SMB Banking in Today's Economy
Global payments are something that many SMBs have struggled with over the years. The traditional systems used by many banks and credit unions are riddled with inefficiencies, delays, and hidden costs. For example, cross-border transactions can take over five business days, and U.S. businesses collectively lose an estimated $150 billion annually due to hidden fees and predatory exchange rates.
There are many factors working against businesses when it comes to cross-border payments. A report by McKinsey highlights that manual processes, lack of transparency, and excessive costs are some of the key things that stand in the way of many companies when trying to optimize their cross-border transactions. This disproportionately impacts industries such as e-commerce, manufacturing, and tech. In each of these spaces, quick and reliable payments are essential for SMBs to shoulder operational costs, maintain inventory, fulfill orders, and meet payroll.
E-Commerce is an industry that stands out among those impacted by payment delays. Any issues surrounding payments can result in stock shortages and lost sales during peak seasons, while any disruption in access to funds can hurt cash flow. The manufacturing sector also suffers from production slowdowns when payments fail to reach suppliers on time.
The inefficiencies of traditional payment systems are also a major pain point for tech companies, which often have employees, contractors, and suppliers spread across different countries. The delay of a few days in processing payments can affect workflow and springs, disrupt partnerships, and prevent businesses from scaling efficiently. At the end of the day, time absolutely is money when it comes to payments, and SMBs cannot afford the burden of wasted time (and money).
Thankfully, the world of payments is modernizing rapidly and there are some solutions available to SMBs who are wise enough to seek them out. As more SMBs embrace modern financial technology, they are discovering new ways to streamline their payment processes and reduce the friction in global transactions.
The Rise of Future-Proof Solutions for SMBs
The issues SMBs are facing are not unique and are certainly not new. In fact, these challenges are a large part of the mission that drives Mozrt and what led us to create the MFX platform.
Tailored to tackle the challenges of cross-border payments, MFX offers real-time FX rates, instant currency transfers, and automated compliance checks. This means SMBs can handle international transactions without the usual delays or risks, gaining a significant edge in the global market.
With the ability to track payments in real-time and ensure automated compliance, SMBs can gain greater control and visibility over their international cash flow. A McKinsey report shows that businesses using streamlined platforms can achieve 30% faster payment processing and cut costs by as much as 50%. For SMBs, this represents a significant improvement, helping to reduce cash flow gaps and reinvest saved resources into growing their businesses.
Things SMBs Should Consider When Choosing a Financial Partner
When SMBs are looking to find a financial institution to handle their cross-border payments, several factors should be taken into account:
Openness to Innovation: It is critical for modern businesses to work with banks and credit unions that are committed to modernization themselves. The banking space is notoriously change-adverse and has been reliant on slow, clunky legacy systems for decades. To pick a financial institution is to pick a partner who can grow with you as the digital age continues to evolve, so it's essential to confirm that your prospective institution is open to innovation and already at the forefront of modernization.
Strategic Partnerships: Due to the archaic nature of the banking space, many institutions struggle to push forward new products, services, or programs in-house as they often don't have the resources, capacity, or knowledge to make it happen. While it might be counter-intuitive, it's actually a very positive sign to see financial institutions partnering with modern tech providers. This indicates that they know their strengths while also understanding their limitations, and they're open to bringing in experts to drive them to success.
A few other things to consider are security and compliance. Are there security measures like multi-factor authentication (MFA), and does the bank offer robust compliance automation? Minimizing risk and ensuring regulatory compliance are critical. Also, the interface itself, the digital experience it offers, and the overall UX/UI. In today's digital landscape, customers want easy-to-use platforms that anyone can pick up and understand instantly.
The adoption of modern solutions like MFX is already transforming how businesses engage with global trade. Mozrt's platform automates and simplifies the payment process, minimizing manual intervention and giving SMBs more time to focus on core business activities. More importantly, as banks continue to join the Mozrt network, SMBs across the U.S. are gaining increasing access to forward-thinking institutions with future-proof technology. These partnerships allow businesses to modernize their approach to global payments and foreign exchange, driving efficiency while reducing costs and risks.
Why SMBs Need to Act Now
As global trade grows and digital transformation becomes a priority, SMBs must modernize their payment processes to stay competitive. According to Oxford Economics, businesses that don't prioritize digital payment solutions could lose millions in revenue by 2030. This is a stark reminder of the potential losses for companies that are not proactive about optimizing global payment processes. By acting now, SMBs can save not only on time but also significant financial resources, giving them a competitive advantage in a fast-moving marketplace.
Cross-border payments remain one of the most significant operational challenges for SMBs in the U.S. But with the right tools, these hurdles can be minimized. Mozrt's MFX platform is setting the stage for a future where global payments are faster, more transparent, and less costly. As more banks join the Mozrt network, SMBs have increasing opportunities to partner with institutions that offer innovative, forward-thinking solutions. The time to act is for businesses ready to streamline their global payments and position themselves for growth.
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