UK Businesses Call For Simplified Bank Payments System

· Over half of UK businesses experienced payment problems in the last 12 months

· 44 per cent cite the time taken for payments to clear as the biggest barrier to trading overseas

· 20 per cent of UK businesses spend at least four days a month managing international payments(1)

· Revolutionary new online payment system could reduce the cost of international payments by up to 60 per cent

A staggering 52 per cent of UK businesses have encountered problems with foreign payments in the last 12 months causing them to spend as much as a month a year managing and reconciling funds, according to a new report released today by Travelex Global Business Payments (GBP).

The study, which was carried out amongst Finance Directors of UK businesses that trade internationally, reveals that some of the biggest barriers to international trade are caused by current banking payment systems.

The biggest barrier to trading overseas is the time payments take to clear, with nearly half of businesses (44 per cent) citing this as a priority problem and as having a major impact on cash flow which is one of the top business imperatives for over a third (37 per cent) of companies.

The lack of clarity over the true cost of international transactions was also highlighted as a key aggravation. Over one in three (35 per cent) cited hidden fees as a frustration and more than fifth of those questioned (21 per cent) expressed irritation that every intermediary bank involved in a payment using the SWIFT network takes a cut to process the payment so that the amount sent isn’t the amount received. This practice, known as ’beneficiary deduction’, makes reconciling payments hugely time consuming.

Other top payments gripes include: having to physically call their bank to track overseas payments (24 per cent); being left to negotiate a resolution by contacting their bank when a payment goes missing (51 per cent); the time required to investigate missing payments (24 per cent); and uncertainty over how long payments should take to be handled — nearly one in ten finance directors claimed to have no idea how long an international payment takes.

The research found that, on average, UK businesses trading internationally make and receive around 201 foreign payments and 669 domestic payments every month, meaning staff must continually input payment data and juggle multiple payment interfaces and multiple logins.

But these issues could soon be a thing of the past. Travelex GBP has today launched GlobalPay, a revolutionary online payments platform which provides businesses with a single secure point of entry enabling them to manage payments and reconcile balances in most traded currencies quickly and easily. The new system can deliver payments faster and could reduce the cost of international payments by up to 60 per cent by avoiding the fees associated with routing payments through multiple intermediary banks to reach the end beneficiary.

GlobalPay can be used by businesses of any size and is suitable for all types of payments – domestic and cross border, urgent and non-urgent. It can be integrated into most front end accounting or ERP systems and hence eliminates the need for rekeying payments into multiple systems, and the need to hold multiple foreign bank accounts. The system improves visibility of cash flow, currency risk, streamlines the international payment process and can dramatically cut the amount of time UK businesses currently waste reconciling and chasing payments.

Adam Tiberi, senior vice president of global product management, Travelex Global Business Payments comments: “We believe that making payments should be easy. Unfortunately, as our research illustrates, the stark reality today is that many companies have to cope with banking systems which lack transparency and cost them time and money. As a foreign payments specialist, Travelex has long recognised the needs of businesses and the ‘pain points’ that they encounter when making international payments and by listening to our customers we have developed GlobalPay to address these problems.”

Tiberi concludes: “GlobalPay is a simple, straightforward and transparent payments service which puts businesses in total control of all of their payments for the first time.”

“We have already trialled this with some existing clients and have received great feedback on the cost benefits — one of our clients is saving over 400 man hours a month.“

GlobalPay benefits include:

· A single payment platform for all domestic and international payment needs

· Automatic integration and reconciliation with leading ERP systems and accounting packages

· Availability of ‘Payment Tracker’ access by both customers and beneficiaries

· Complete transparency in, and reduction of costs associated with international payments — avoiding SWIFT means customers can avoid costly outgoing and incoming wire fees and beneficiary deduction.

The research is part of an ongoing study by Travelex Global Business Payments into the pain points caused to businesses by making international payments. Earlier research revealed that UK SMEs waste a whopping £100 million every year chasing foreign payments that are delayed or go missing in the banking network.

(1)UK businesses of 100 employees or more