When SMEs look to trade abroad, they can often find themselves facing management challenges when it comes to organising and ensuring all their accounts in different regions are accurate and working as they should. Looking to alleviate this issue in the UK, WorldFirst, a one-stop digital payment and financial services platform for global businesses, has launched a new e-commerce growth solution.

Called the World Account, the new solution by the payments platform specifically focused on SMEs in international trade brings down the costs associated with making an international transfer for UK firms. Typically these costs which span compliance, FX and payment operations account for two to three per cent of the value of a transfer.

However, with the World Account this is reduced to less than 0.75 per cent, according to WorldFirst industry analysis. This helps SMEs boost their margins to sustain long-term business growth.

Untapped opportunity in cross-border e-commerce

Global trade is expected to grow by 3.3 per cent this year and retail e-commerce sales are expected to grow 8.8 per cent over the same period.

However, in the UK, the Office for National Statistics’ most recent Annual Business Survey of Exporters and Importers revealed that just over one in every 10 UK businesses (11.4 per cent) are involved in exporting. This is a number that had only risen by 0.7 per cent in the preceding three years. When polled by a UK bank, 80 per cent of businesses agreed that exporting is critical to their business’ future.

Bruce Ding, general manager of WorldFirst International Business, notes: “Against this backdrop, there’s an excellent opportunity for many more UK SMEs to tap into the opportunities of international trade. Despite the complexities involved in cross-border e-commerce, with the support of external partners like us, we’re seeing SMEs are increasingly optimistic about the opportunities presented by exporting overseas.”

In 2022, the total cross-border e-commerce market in Europe, including the United Kingdom, amounted to a turnover of €265billion (excluding travel). Of this total, €167billion, or 63 per cent, was generated by marketplaces. However, European countries are falling behind compared to those across South America and Asia, where multiple markets have seen significant growth in e-commerce sales, according to eMarketer.

Younger generations drive cross-border e-commerce

WorldFirst finds that more than 50 per cent of sellers using its cross-border e-commerce solution are Gen Z or Millennials. This suggests these generations of business leaders are more aware of global e-commerce opportunities.

Ding adds: “Consumers are increasingly buying directly through SMEs’ websites, online marketplaces and social media platforms. This means people are purchasing from businesses located across the globe without even realising they’re doing so. Younger business owners have spotted this opportunity to run their independent e-commerce stores or set up fronts on global e-marketplaces.”

However, challenges, ranging from the complexity in international payment and foreign exchange, payment fraud, and hidden service charges, still put away aspiring business owners, threat survival of start-ups and undermine durability of existing businesses.

To help solve these challenges, UK SMEs can streamline international operations by partnering with external vendors. UK business owners can open a World Account within minutes to be able to trade like a local around the world. The account supports payment collection with 14 local or cross-border accounts and pay-out in more than 40 currencies to over 130 countries and regions. WorldFirst’s extensive partnerships with key e-commerce platforms facilitate seamless cross-border transactions.

WorldFirst has a strong track record in driving growth in e-commerce for SMEs. WorldFirst is the top payment service firm by transaction volume for China-based e-commerce businesses which sell on international e-marketplaces, such as Amazon and Lazada. In January 2024, new customer acquisition by WorldFirst in South-east Asia increased 16 times and the overall transaction volume of its customers in the region grew by 90 per cent on year.

Viva.com, Europe’s technology bank for payments powering card acceptance in 24 markets, has launched ‘Merchant Advance’; a new credit solution looking to solve critical cashflow issues for thousands of businesses across Europe, helping them invest in growth.

Viva’s Merchant Advance looks to offer transparent capital to businesses, based on merchant acquiring data. Loan disbursement is instant, to help businesses of any size or type immediately access capital for growth.

Merchant Advance by Viva.com is currently available in Belgium, Germany, Netherlands, and Spain, with more European countries of operation following soon.

Yannis Larios, senior VP of strategy and business development at Viva.com, explained: “Having access to reliable and flexible capital is critically important for growing businesses, but for millions of European merchants, it’s a real struggle to find the right solution.

“Traditional capital providers, and even newer market entrants, have to vet businesses properly, which results in time-consuming processes before any decision is made.”

While other capital providers can force businesses into lengthy application processes, Viva’s Merchant Advance leverages the merchant’s payment history with Viva.com – enabling access to near-instant capital with no fuss.

The new credit solution boasts smart prescoring, based on advanced payments data analysis for each business; as well as fast access to capital, charged with a single explained fixed fee.

It also offers a flexible automated repayment process via a percentage of daily card sales; no late payment fees; as well as a fully digital process with no collateral or other commitments.

Supporting business growth ‘without restrictions’

Merchant Advance is the latest inclusion in Viva.com’s market-leading digital payments bundle, a collection of integrated services that combine to power all businesses across Europe. From acquiring and issuing to business accounts and tailored financing, Viva.com’s solutions help businesses grow without limits.

“Viva’s Merchant Advance changes the game, allowing our customers instant access to working capital based on smart prescoring. This allows us to offer instant, flexible and transparent capital that they can use to grow without restrictions. Merchant Advance is the latest addition to our product suite, built to solve payment issues for businesses of all shapes and sizes,” added Larios.

The new Viva credit solution will be provided through a range of leading financial partners.

Viva.com is Europe’s first technology bank for payments, powering card acceptance across 24 countries and over 985 devices. With an ECB-approved banking licence and physical presence in 24 European markets, Viva’s ‘Tap on Any Device’ for in-store payments, smart checkout for online payments, and marketplace payment solution, help European businesses of any size to accept and manage payments how they want.

The fintech industry was challenged to harness the potential of financial technology to drive financial inclusion and alleviate poverty at this week’s FinTech North conference in Manchester.

Held at Whitworth Hall in Central Manchester, the fifth annual conference brought together industry leaders, innovators and experts to explore the critical role of financial technology in expanding access to financial services, particularly among marginalised populations in developing countries.

Highlighting the urgent need for financial inclusion, Dr. Andrea Lagna, senior lecturer in fintech at Alliance Manchester Business School, stressed the pressing issue of financial exclusion, affecting approximately 1.4 billion people worldwide.

He painted a vivid picture of individuals who lack access to basic financial services, making it impossible for them to escape poverty. However, he offered a ray of hope by underlining how fintech innovations can effectively address this global problem.

“Imagine being so poor that you cannot afford a bank account. You have no access to car payments, you cannot borrow money. You cannot buy insurance services. This scenario is not fictional. It is the reality for many people around the world – 1.4 billion people around the world are financially excluded.”

The confluence of fintech and financial inclusion

As he delved deeper into the topic, Dr. Lagna provided insights into the historical evolution of financial inclusion, highlighting how it emerged as a market-based approach to poverty reduction and economic development in the early 2000s.

He pointed out the shift from microfinance to financial inclusion, especially as international organisations like the IMF and the World Bank recognised the potential of fintech in this realm. The success story of M-PESA in Kenya exemplifies the transformative impact of mobile money services on financial inclusion.

Dr. Lagna acknowledged the ongoing debate surrounding fintech-led financial inclusion. While optimists celebrate how fintech can improve financial inclusion, critics argue that it may not eradicate poverty entirely. He stressed the need for concerted efforts to reduce barriers to financial inclusion and the importance of ensuring that the mission of financial inclusion remains central for fintech firms.

“Some argue that too many organisations refer to fintech-led financial inclusion, without a clear and truthful focus on the poor. So fintech financial inclusion sometimes may lose sight of poor individuals.”

Areas of focus for positive impact

In the latter part of his presentation, Dr. Lagna outlined three key areas where collaboration among various stakeholders can enhance the positive impact of fintech-led financial inclusion. These areas included business strategy, digital technologies and the business environment.

• Business strategy: the importance of preventing ‘mission drift’ in fintech firms, ensuring that their socially oriented mission remains intact, even when facing profitability challenges or regulatory changes.
• Digital technologies: the need for designing digital technologies with a focus on the habits and needs of unbanked individuals, enabling them to access and utilise financial services effectively.
• The business environment: the roles of civil society organisations and regulators in advancing financial inclusion. Plus, the role of regulators in fostering responsible fintech innovation while ensuring consumer protection and data privacy.

Also on the FinTech North Manchester agenda

The conference highlighted how Greater Manchester’s fintech scene is rapidly evolving, becoming of the largest fintech hubs outside of London.

Greener finance

One conference session put the spotlight on greener finance. Panellists, including Alex Mollart, CEO of Tandem Bank, Georgina Mitchell from Wellhouse Consulting, Will Smith, co-founder of Tred and Katherine Keddie, co-founder of Adopter, discussed the challenges of greenwashing, the importance of standardised reporting, and regulatory measures to address these issues.

There was an air of optimism about the ongoing transition to greener financial products and the increasing awareness of environmental and social considerations in investment decisions. They emphasised the collective responsibility of the financial industry in driving the transformation toward a more sustainable future.

Strong partnerships

Janine Hirt, CEO of Innovate Finance, highlighted the importance of focusing on fostering collaboration and advocating for the sector’s interests. She outlined  key priority areas for Innovate Finance: fostering stronger partnerships, enhancing skills, talent, culture and governance, promoting international connectivity and scaling, supporting fintech as a force for good, and advocating for effective regulation and policy.

Hirt also mentioned that despite economic challenges, the UK remains a global leader in fintech investment, with high adoption rates and a positive impact on the UN Sustainable Development Goals. She urged the sector to maintain proactive regulation, address climate change and promote diversity.

“We need a regulatory framework that is protecting the consumer. But equally, we want the British consumer to be able to access the benefits of all of this new technology.”

Providing support

Phil Vidler, co-founder and managing partner of the Fintech Growth Fund and CEO of FinTech Alliance, discussed the mission and goals of the Fintech Growth Fund during his session. The goal is to provide not only capital but also expertise and support to fintech companies as they scale and address challenges faced during their growth stages. The fund also aims to play a crucial role in nurturing and advancing the UK fintech ecosystem by filling the middle gap in growth-stage investments and leveraging the knowledge of strategic partners to drive success.

A recent survey by 72Point commissioned by Revolut Business, the global business super app, has found that 87 per cent of UK businesses identify payment facilitation as the biggest financial challenge currently facing their business. As a result, Revolut Business is launching ‘RevTag’, its instant and free payments ecosystem.

The complications that arise when needing to enter IBANs or other beneficiary details are all removed with RevTag. In lieu of them, individuals or businesses only need to enter the RevTag of the recipient in the Revolut Business app. Over 30 million retail consumers already have access to this feature – now businesses will too.

The network makes sending and receiving fee-free-cross-border payments in over 29 currencies possible. The feature is completely free and provides businesses with the ability to pay employees and contractors with ease in more than 150 countries and regions around the world.

Fees are taking a heavy toll on business payments

As a part of its research, 72Point uncovered that sending, receiving and foreign exchange all list as the biggest financial challenge for businesses. It further shows that high costs and processing times are contributing to this challenge

In fact, just one in ten businesses report being able to make instant cross-border payments. This is because the majority of respondents (58 per cent) report payments typically taking more than 12 hours to process

Another challenge comes in the form of cross-border hidden payments. This often takes place when the financial service relies on a third-party bank to process the payment.

The report also found that more than 71 per cent of businesses in the UK reported paying fees of three per cent or more on cross-border payments. Meanwhile, one in 10 (13 per cent) businesses pay fees of six per cent or more. This can take a heavy toll on business finances in the current economic climate.

A desire for change

Revolut’s research also reveals a broader desire for more efficient and cost-effective ways to make global payments. When looking for payment solutions, almost half (48 per cent) of UK businesses said cost and speed of payments were the two most important factors they considered. In fact, 97 per cent of businesses said the availability of cross-border payment solutions was an important factor in picking which account provider to use.

James Gibson, general manager of Revolut Business said: “We are excited to introduce our new zero-free payments network with the launch of RevTags for business customers. Extending the availability of this feature to Revolut Business customers, paired with the launch of payout links, marks a significant milestone in our mission to make cross-border payments fee-free, instant, and seamless for businesses operating globally.”

RevTag is the next step in Revolut Business‘ mission to simplify international payments. Businesses will also have the added benefit of payout links too. This enables payments to customers and suppliers using just a URL, without the need for account details. Each payout link provides options to the recipient on how they would like to be paid. It allows Revolut Business customers to track and manage the payment from their account.

Bringing STEM vocation awareness to the forefront and looking to encourage girls to pursue a career in regtech, Next Tech Girls, the social enterprise on a mission to improve the representation of women in the tech workforce, has partnered with regtech REGnosys.

Girls are less likely to study STEM subjects (64 per cent) at school than boys (83 per cent) according to PwC. Its research further shows this gender imbalance trend continues at university and at a career level: only three per cent of women have a tech career as a first choice. This is five times smaller than the number of men with it as their number one choice (15 per cent). One reason for this is a lack of information about what working in the sector involves. Meanwhile, another is girls aren’t encouraged to pursue a career in tech.

As a result, only 26 per cent of those working in the tech industry are women. However, Next Tech Girls is not sitting idly by. The organisation has provided over 3,000 tech-focused work experience opportunities to girls in the UK since 2016. It also makes an effort to include those from lower-income or ethnic minority backgrounds. Consequently, 96 per cent of placement participants have pursued a career in tech.

“Partnering with REGnosys represents another crucial milestone in our mission of breaking down barriers for girls and young women to embark on a career in tech.” – Emily Hall-Strutt, Next-Tech Girls

Impact in regtech

Every sector within the fintech industry needs to reevaluate what it can do to tackle gender imbalances, and this is exactly what REGnosys is doing in regtech. Acting by example, the firm has increased its number of women from zero to four since the start of 2022. But it isn’t stopping there. By partnering with Next Tech Girls, REGnosys looks to continue widening accessibility to careers in technology for girls and young women.

Commenting on the partnership, REGnosys chief executive and Founder, Leo Labeis said: “It is vital to acknowledge the hard truths about the issue of gender inequality in the tech industry to tackle the problem at its core.

“As a small, tech start-up, it has never been easy to offer the types of perks that are important in attracting and retaining women. However, by proactively working with recruiters to articulate our hiring drive and putting a referral programme in place, amongst other measures, we are proud to have made great strides in establishing more equal gender representation. Partnering with Next Tech Girls will support REGnosys on this journey, as we look to cement and bolster our long-term DEI drive.”

A culture that “reflects the needs and perspectives of everyone in society”

Emily Hall-Strutt, director of Next-Tech Girls, said: “Over the past year we’ve gone from strength to strength in inspiring the next generation of women in tech, organising placements for over 100 girls across the UK and engaging more than 2,500 through our online events which were launched last October.

“Partnering with REGnosys represents another crucial milestone in our mission of breaking down barriers for girls and young women to embark on a career in tech. As we look to expand our impact throughout the rest of 2023 and beyond, we’re excited to be working with REGnosys in fostering a culture where technology reflects the needs and perspectives of everyone in society.”