International payments are the most significant barrier to British SMBs expanding internationally, according to new research by Wise Business, the business account for going global. 

The new research, which saw YouGov poll more than 4,800 SMBs worldwide, found that almost a third (30%) of all British SMBs surveyed who have been put off from international expansion, have been put off by the cost and complexity of managing international payments. Handling tariffs and taxes (28%) came second, with supply chain disruption (24%) third. 

The research considered the state of small- and medium-sized businesses operating abroad, classed as ‘micro-multinationals’ - and found that few British SMBs have left Blighty: 

• Barely a third (35%) of the UK’s SMBs can be called micro-multinationals

• Only America’s (34%) and the insular Japan’s (15%) score worse 

• While Singapore’s are the most international, with 70% of its SMBs micro-multinationals  

Of those British businesses that do go abroad, many struggle with international banking - which includes managing currencies, handling foreign exchange rates, and setting up foreign bank accounts: 

• 22% of  the UK’s micro-multinationals cited international banking as a factor that had made it harder to operate abroad over the past five years

• Only regulation (23%) and tariffs and taxes (23%) scored higher 

The problem is even worse worldwide: 

• 44% of micro-multinationals worldwide cited international banking as a factor which had made it harder to operate internationally

• No other factor scored so highly, with tariffs and taxes (34%) and regulation (22%) coming second and third

The broken international banking system is still based on traditional banks, with 78% of all micro-multinationals surveyed - and 81% of those in the UK - using bank transfers or card payments for international payments. 

This is despite only two-in-ten (21%) of all micro-multinationals surveyed believing banks offer value-for-money, a number which sinks to a sad 7% for British micro-multinationals. 

James Bell, Head of Wise Business, said:

“Lots of banks claim to help small businesses - the reality is different. Small businesses flourish when they look abroad, yet most are held back from ever doing so by an international banking system that works against them. Fees are hidden and prohibitive, services too slow and painful. 

“At Wise Business, we believe small- and medium-sized businesses deserve better - that they should have the opportunity to become a micro-multinational, without a broken system getting in the way.”

BookAclassic is a British business that allows users to book classic cars. A Wise Business customer, BookAclassic operates across Europe.

Kent Mosbech, CEO, BookAclassic, said:

“Growing our business across Europe has not been easy. At first, we found international banking to be a real headache - one that we didn’t need, given all the other stresses of running a startup. We were faced with having to open different local bank accounts in each market and the costs of international payments were prohibitive.” 

Wise Business provides an alternative to traditional providers. Businesses can send money abroad for a small, up-front fee, with no fee hidden in the exchange rate - and 40% of all payments arrive instantly. Business-friendly features include Wise’s local account details, which save businesses having to open bank accounts in other countries.