What Winston Churchill was first to call “the special relationship” between the U.S. and the U.K. remains handy phraseology for the dealings of these nations, especially in the finance arena.
As prime trading and finance partners on the world stage, the U.S. and U.K. are also at the tip of the spear for modernizing cross-border payments. The June 2021 report, Innovating Cross-Border Payments: Innovation Drivers, a PYMNTS and Visa collaboration, surveyed upwards of 460 payments executives from 22 industries in both markets to understand recent developments.
Among the first things to leap out is a craving for savings on both sides of the pond.
“One of the chief benefits that surveyed U.K. and U.S. businesses believe cross-border payments innovation can provide is cost reduction,” per the Playbook. “This benefit is more commonly cited by U.K. businesses. Sixty-two percent of U.K. businesses believe that reducing the cost of cross-border operations is one of the key benefits of innovation in this area, a benefit also cited by 54 percent of U.S. businesses.”
The report noted that a gamut of new tech, from real-time payments to AR/AP automation to virtual cards, “can enhance many aspects of businesses’ cross-border payments processes,” and businesses often have specific goals in mind for innovation agendas. These vary depending on whether the business is U.K.- or U.S.-based, as is amply illustrated in the new Innovating Cross-Border Payments study.
Yanks Salute Efficiency, Brits Nod To Transparency
Some of the most compelling content in Innovating Cross-Border Payments describes the differences between what companies in these like-minded nations want from innovation.
While American and British businesses aren’t far apart on liking innovations that enhance cash management capabilities and reduce costs (56 percent and 51 percent, respectively), the study finds that “two additional benefits in which U.S. businesses express more interest than U.K. businesses: reduced errors and enhanced account receivables (AR) efficiency,” with 19 percent more U.S. businesses citing reduced errors as a key benefit. “U.S. businesses are also 59 percent more likely than those in the U.K. to see enhanced AR efficiency as a key benefit of innovation.”
It balances out, though, as 14 percent more U.K. businesses “cite improved transparency as an expected benefit of innovation, for example. U.K. businesses are also 18 percent more likely than U.S. businesses to invest in innovations that can help them pay their suppliers faster.”
Enterprise And SMB Priorities Diverging
Small and large businesses have different priorities, and these are fairly similar among the U.S. and U.K. businesses PYMNTS surveyed for Innovating Cross-Border Payments: Innovation Drivers.
For example, the study states that 55 percent of mid-sized businesses ($100 million to $500 million in annual sales) and smaller businesses ($50 million and $100 million in annual sales) in both countries cite cost reduction as a core benefit of cross-border payments innovation.
On the flip side, “Larger businesses are also the most likely of any size group to see rapid supplier payments, reduced reliance on checks and enhanced AR efficiency as benefits to be gained from cross-border payments innovations,” per the Playbook.
For their part, smaller businesses see innovations’ potential to mitigate fraud risk, with 64 percent of the smaller businesses in the study responding “that reduced fraud risk is one of the chief benefits of cross-border payments innovation. This is far more than the 51 percent of larger businesses and 46 percent of mid-sized businesses that said the same.”