As Australian SMEs look to capitalise on the global e-commerce boom, cross-border payment solutions are emerging as a crucial component of success.
A recent conference brought together industry experts to delve into the strategies and technologies needed to thrive in the international marketplace.
Led by Ant International’s WorldFirst, a one-stop digital payment and financial services platform for global businesses, particularly SMEs in international trade, the event underscored the exceptional e commerce opportunities available to Australian businesses, and why the rapidly changing consumer preferences make efficient cross-border business payment services more crucial than ever for SMEs aiming to expand internationally.
Cross-border payment inefficiencies hinder e-commerce growth potential
Professor Tim Harcourt from the University of Technology Sydney, who was the first Chief Economist of the Australian Trade and Investment Commission (Austrade), said “for small and medium enterprises (SMEs) who are the heartland of the exporter community, the cost-of-living pressures are tough, but the benefits of e-commerce have provided opportunities for expansion.”
Middle class consumer growth – using both digital and physical avenues to market – is strong in Asia, especially China, India and the ASEAN countries, and in the emerging markets of EMEA and Latin America, said Mr. Harcourt.
Gabriel Leibovich, a pioneer of Aussie e-commerce who co-founded Catch Group, Fingertip.com and 1Bracelet.org, said social media has transformed how consumers shop online with profound implications for e-commerce businesses.
“Shaped partly by social media, consumer habits and preferences have become more volatile than ever. This volatility makes fast and efficient cross-border business payments crucial for e-commerce businesses. By enabling sellers to pay their suppliers promptly, these businesses can secure shipments of goods and adapt quickly to changing consumer demands,” he said.
However, inefficiencies in cross-border business payments may hinder SMEs from adapting to rapidly changing consumer preferences in global e-commerce, said Jim Vrondas, Country Manager, ANZ at WorldFirst.
Australian banks typically don’t offer offshore foreign currency accounts, requiring SMEs with overseas customers to seek localised payment solutions from foreign banks, which is often a difficult, costly, and time-consuming process. To open a foreign bank account can take months, the payment itself can take days to arrive and often the SME has no control over the conversion of sales revenue earned offshore, he noted.
Open foreign currency account within minutes to start global trade
To help Australians capitalise on the positive e-commerce trends, WorldFirst tailors digital business payment solutions for online sellers and SMEs looking to expand overseas. Within minutes and online, e-commerce sellers can open a foreign currency account to be immediately able to collect sales proceeds in 15 local-currency accounts or solutions from over 100 e-commerce market platforms worldwide.
“By offering more overseas local currency accounts than the financial incumbents in Australia, WorldFirst widens the opportunities for its e-commerce clients to sell in more countries,” said Mr. Vrondas.
Having a local currency account is important because most local e-marketplaces will only pay out sales proceeds to accounts based within the country the e-marketplace operates in. For businesses that receive money directly from their customers, they can receive funds more quickly and cost effectively by having their customers settle into a locally currency account overseas, he added.
WorldTrade facilitates secure, fast payment to overseas suppliers
WorldFirst has also launched an international sourcing payment solution called WorldTrade to streamline supplier payments. Traditionally, sourcing even a product sample from a supplier has been expensive and fraught with trust issues between buyers and sellers. WorldTrade uses smart contract fulfilment technologies to protect and enhance SME buyers’ sourcing operations by safeguarding buyers’ funds, ensuring timely delivery of goods, facilitating faster payments to sellers, and reducing transaction costs by up to 30%.
Through World Account, the flagship multicurrency business account by WorldFirst, Australian importers can pay overseas suppliers in over 40 currencies across 200 markets over the globe. WorldFirst has further increased the payment settlement speed, with World Account now settling 90% of payments within one business day. International transfers between World Account holders are instant and free of charge.
WorldFirst has served one million customers worldwide and is connected to over 100 marketplaces. Between January and June 2024, the total transaction volume by new Australian WorldFirst clients rose over 60% compared from a year earlier, speaking to an increasing demand for fast and secure digital cross-border payment service by local SMEs.
“The speedy payment services we provide is secure with client funds deposited at the world’s leading banks. We also leverage AI and other technologies to comprehensively conduct fraud prevention and risk evaluation, ensuring a streamlined and secure payment process for our clients,” said Mr Vrondas.
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
