UK SMEs plan for international expansion post-COVID, but payment hurdles threaten to handicap growth

LONDON, UK, 3 NOVEMBER 2021 – Global fintech platform Airwallex today announced findings from a survey conducted on UK-based small and medium-sized enterprises (SMEs), revealing that more than three-quarters of SMEs in the UK have plans for geographical expansion next year, with more than two-thirds believing that digital adoption will be important to enable accelerated growth opportunities. 

The poll of 500 business decision makers considered the reality facing UK SMEs as they look to invest in, and grow, their operations in 2022.

UK SMEs push ahead with international expansion

Widespread UK SME global expansion is planned for 2022, with 77% of those polled having said they plan to expand their presence in Europe and/or other international markets. 62% (six in ten) of UK SMEs plan to expand into Europe next year, and 38% have expansion plans beyond Europe.

Expansions plans are driven by the need to extend their business networks:

• More than half (54%) of UK SMEs’ expansion strategies for 2022 involve sourcing new customers

• Over two-fifths (45%) are aiming to source new suppliers abroad 

• To support their growth, nearly two-fifths (43%) also plan to expand marketing activities, with the same figure opting to establish new trade partnerships in international markets

Hidden fees a pain point for UK SMEs

Despite the focus on international expansion, the survey also suggested that business decision makers within UK SMEs are largely resigned to making extensive payment fees and foreign exchange. 

Cross-border payment challenges continue to have brought significant frustrations, particularly at a time when COVID has forced many to make and manage cross-border payments.

• More than half (53%) of UK SME business decision makers view international FX fees on cross-border payments as a pain point that takes too much effort to work around, while 26% think they are a pain point which cannot be avoided

• Over two-thirds (70%) agree the 'hidden fees' that come with dealing internationally with merchants are just a “necessary evil" of doing business across borders

• Managing payments in local currencies is also an issue: over half (58%) agree that paying international suppliers in their local currencies is a headache

UK SMEs keen to invest in business growth

In addition to expansion plans, the survey also gauged the impact payment fees might have on UK SME growth. Over two-thirds (69%) of respondents agree that businesses which don't take steps to cut down on unnecessary fees/charges around international trade are handicapping their growth.

Indeed, the survey revealed that losses from card fees specifically could otherwise be put to better use enabling business growth:

• Three-quarters (75%) of UK SMEs would invest that freed-up budget back into their business

• One fifth (21%) would invest savings back into staffing

• 17% would opt to invest in marketing, with the same figure opting to expand the product range 

• Around one in ten (12%) would invest in facilities, e.g., office expansion

 UK SMEs show increased appetite for digital adoption

Two-thirds (66%) of UK SME business decision makers believe that organisations which don't adapt their banking strategy for the digital age will struggle against competitors. For many, the visibility and transparency that a digital platform offers is key: 64% of respondents think businesses without a real-time view of expenses, transfers, and all other transactions to track are not firmly in control of their finances.

While 7% of respondents have already moved all or the majority of their finances away from traditional banking to manage them on a digital fintech platform, a further 68% would consider doing this in future. In fact, more than two-fifths (44%) are considering doing this within the next 12 months.

Jed Rose, GM, EMEA at Airwallex comments, “As businesses throughout the world have been impacted by the pandemic, more innovative, tech-driven strategies are giving them the opportunity to enhance their globalisation efforts. Whether it is the ability to open accounts in new markets within seconds, or combining all international payments into one platform for greater control and flexibility, identifying tech platforms that can enable end-to-end solutions which support business expansion across borders can facilitate sustainable future growth for businesses of all sizes.” 

ENDS

Methodology

This survey from Airwallex – carried out by Censuswide between 3rd-15th September 2021 – surveyed 500 business decision makers in UK SMEs (companies with 50-500 employees).

About Airwallex 

Airwallex is a global payment platform with a mission to empower businesses of all sizes to grow without borders, and by doing so, contribute to the global economy. With technology at its core, Airwallex has built a financial infrastructure and platform to help businesses manage online payments, treasury and payout globally, without the constraints of the traditional financial system. Airwallex has secured over US$700 million since it was established in 2015, and is backed by world-leading investors. Today, the business operates with a team of almost 1,000 employees across 19 locations globally. For more information, please visit www.airwallex.com.