The Halloween season is one of the best of the year. The Fall colors, the crisp air, and especially the spooks. If you’re into that sort of thing.
The scares don’t stop on November 1st, though. One of the biggest culprits for anxiety and jumpiness are your payments. That’s a year-long panic attack waiting to happen.
The risks of fraud, lost money, and delays – Lions, tigers, bears, all that. And while Dorothy and her Yellow Brick Road pals were more concerned about wild animals and a wicked witch, business owners have to consider other obstructions on the Yellow Brick Road of payment processes.
So what’s the deal? Are payments really that scary?
Well, the numbers don’t lie.
Small business payment statistics
In the jungle of business and payments, small business owners face a lot of challenges, especially when sending and receiving them internationally.
Payments can hurt SMBs, especially when a business and their partners are stuck in their ways.
When sending domestic payments, recurring or not, there are plenty of options, such as cash or check, bank wires, ACH (automated clearing house), Fedwire, and digital payments processors.
But when it comes to international payments, many people think wires are the only way to go. That causes prices, risks, and wait times to skyrocket.
The rate of lost and late transfers
Delays
Speed is a huge concern among business owners, their suppliers, and manufacturers. With such a lengthy process just to send the payment, any additional delays can mean big problems for both sides.
International wire transfers generally take between 3-5 business days. But, depending on where the money is going, and considering unknown delays, it can take much, much longer. That’s why it’s best to ensure all parties are on the same page with all information entered accuratelyThe amount of time it takes to complete a wire transfer relies on a few factors:
According to Deloitte, “30% of middle market businesses quote payment processing time as a major issue, and around 47% of the suppliers are paid late for their products or services.”
These delays in payments are terrifying. They likely arise because of the mismatch of payment options, as “90% of small businesses accept checks. Cash is a close second, at 72%.”
Why is this alarming? Because it’s connected to another heavy stat.
Cash flow is arguably the biggest challenge for SMBs. Cash flow relies on timely payments. When accounts receivable is stuck waiting on a check in the mail, cash flow will surely feel the it. Not only are checks slow, there’s no way to track where the payment is at any point in time. You know the saying, “the check’s in the mail”? It implies a bit of waiting or grace period.
In order to solve the pain point of delayed and lost payments, banks and processors create a new pain point: charging a fee to trace wire transfers and lost payments.
What’s more, according to PYMNTS.com, “⅓ of all businesses in Canada, US, Brazil, and Mexico have invoices past 90 days due.”
The anxiety of lost and delayed payments is due to a lack of transparency. Receivers may be thinking, “Where’s my money? Will it ever get here? Is there a problem?”
Which leads to the next round of spooky stats. Hope you’re ready.
Fraud
Of course, developing tech has a dark side. While technology is growing to create better, delightful user experiences, so are its contenders. And while payment scams are usually very cheesy and easily avoidable, every so often, the timing lines up and the scam works.
A 2014 survey by Deloitte shows that about 22% of middle market businesses reported payments fraud. This might be due to the fact that “existing payment methods don’t always provide the right level of security for online payments.”
The fees, not the fees
Outdated payments methods aren’t just inconvenient. They can also cost small businesses quite a bit in fees.
Deloitte cites the high processing costs of processing payments: “35% of businesses report high processing costs as a major challenge with traditional payment methods. It costs a typical Accounts Payable (AP) organization nearly $8 to process a single supplier payment. Also, 62% of costs stem from labor.”
Bank wire transfer fees will depend on the exchange rate, processing fees, as well as any intermediary banks that help move your money towards your receiver. The majority of big banks charge over $15 to send and receive money domestically. Some banks even double that. And when it comes to international wires, the national average for outgoing payments is $44.
Bank wires have advanced from their original telegraph format. But since the SWIFT network was released in the 1970s, bank wires have been stuck. Still, 52% of all B2B payments are done using a bank wire transfer.
Solutions?
Business owners need a resolution to the payments horror show. I mean, look at this dog. Don’t you feel a little better already? Honestly, this dog is a little bit like Veem.
Remember how The Wizard of Oz sent Dorothy home in hot air balloon? Replace Dorothy with your money, and you’ve got a wire transfer.
But Veem has a pair of ruby red slippers to get your payments safe and sound to their destination. Underneath the scary sheet of business payments, Veem is a happy-go-lucky good-boy that just wants to help you with your international business payments. Now I’m imagining a dog at a desk sending and receiving money. I think we all feel a bit better about this whole thing.
The best thing about bank wire transfers is that you don’t have to deal with them anymore. Veem partners with your bank to translate the entire process into a simplistic and user-friendly transaction.
Veem uses innovative technology to minimize the costs and time involved with sending money overseas. Plus, you can track transfers and receive notifications if something is missing or delayed.
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