Regional SMEs more willing to switch payment providers, says MasterCard

 

Cross-border payment services in Latin America and the Caribbean represent a US$23 billion annual revenue opportunity for banks and payment companies. 

 

But growing numbers of small and medium-sized businesses are willing to switch providers in search of faster, more reliable international transactions. 

 

That's according to new research by MasterCard and global payments intelligence firm, FXC Intelligence. 

 

The study found that cross-border payments are becoming a key battleground for financial institutions, with 9 out of every 10 SMEs surveyed in Mexico, Brazil and Colombia saying they would consider changing payment providers. 

 

The businesses indicated that up to 70 per cent of their international payment transactions could be shifted to alternative providers offering better service. 

 

According to the report, SMEs are increasingly frustrated by delays, limited transparency, and the amount of time required to resolve payment problems. 

 

It says roughly one in every nine cross-border payments requires a follow-up or investigation with problematic transactions consuming up to 3.5 hours of staff time.

 

MasterCard estimates that every one per cent shift in cross-border payment flows represents approximately US$230 million

in annual revenue that could move between banks and payment companies across the region. 

 

The report says many SMEs are no longer relying on a single financial institution for international transactions. Instead, they are spreading payments across multiple providers, choosing services based on reliability, transparency, and predictable settlement times.

 

MasterCard says financial institutions will need to modernise their cross-border payment systems by improving payment tracking, reducing manual processing, increasing transparency on fees and delivery times, and making international transactions more efficient as trade across Latin America and the Caribbean continues to expand.