By Harry Scherzer, CEO, Future Forex
Small and medium-sized enterprises (SMEs) make up more than 90% of all formally registered businesses in South Africa and account for 40% of the country’s GDP. A growing number of these SMEs have to make international payments and money transfers, too. Whether they’re making payments for export and import purposes, paying for international software, or even paying international salaries, they all require currency exchanges. But for most of these businesses, making international payments and money transfers is a massive headache. In large part, that’s because banks, which otherwise put a lot of capital into providing great customer experiences, don’t do so with international payments. Unless you’re a huge client that’s doing significantly over R100 million a year in international payments, you’ll be lucky to get personalised support and a user-friendly experience from your bank when it comes to transferring funds abroad.
In fact, SMEs trying to use their banks for international payments and money transfers will quickly discover how unfriendly the process can be. Not only will they have to deal with overly complex and outdated processes and procedures, but they’ll also struggle to get help when they need it.
But if using banks for international money transfers is such a big headache, where should SMEs turn instead? While the answers to this question may have been limited a few years ago, that’s no longer the case, and, with the right alternative, international money transfers can be made much easier.
The trouble with banks
Before giving guidance on what SMEs should look for in an alternative international money transfer provider, it’s worth taking a deeper dive into why the typical banking experience is so poor.
One of the significant customer experience issues banks have is a lack of proper technological implementation and automation. Instead, people and businesses wanting to make international payments and money transfers will likely have to download, print, and manually fill out reams of forms. Once emailed back or, even more frustratingly, dropped off at a physical branch, someone from the bank will then have to manually input these details into its system. It’s frighteningly inefficient and comes with a significant risk of human error.
International payments and money transfers also frequently require approvals from SARS and the Reserve Bank. Along with submitting the correct BoP codes, banks are unlikely to help you out with these. As such, their customers would have to try and sort those complexities out themselves, without necessarily having the expertise to do so.
Taken together, these issues can result in unnecessary delays to transfers and payments. For someone trying to secure a home in the UK or pay for a shipment of solar equipment, those delays can be incredibly costly.
Even if that all goes smoothly, bank customers face other struggles, particularly if there’s an issue with the currency exchange. Should that happen, they’ll quickly discover that trying to deal with a bank’s customer support is something that nobody should have to deal with. That’s especially true for an area like foreign currency exchange, which requires far more in-depth understanding than the kind of scripts that bank contact centres typically work with.
Finding excellence in the alternatives
While it’s understandable that SMEs go to banks for their international money transfer needs – they’re what they use for almost all other transactions, after all – there’s no doubt that they can be better served by alternative options that are filling the void between banks and customers. But what should they look for when choosing an alternative?
Ideally, they should identify an international money transfer provider that prides itself on righting everything that the banks do wrong. That means the provider should take a customer-first approach which blends automation and expertise.
From an automation perspective, customers should be able to fill in simple, easy-to-use forms online, with their details automatically appearing on the provider’s system. That should speed up transactions and reduce the risk of errors.
Beyond that, SMEs wanting to make international money transfers should look for a provider that prioritises in-house expertise, assigning each client a dedicated Account Manager who fully understands the nuances of their business. This expertise should also be available across whichever channel the customer is most comfortable using at any time.
Make the switch
So, while making international money transfers can be challenging, it doesn’t have to be. If SMEs are prepared to make the switch from banks to independent providers that prioritise a client-first approach, they can experience easy and efficient payments without any of the frustration associated with banks.