Almost a third of small and medium-sized US enterprises (SMEs) depend on friends and family for international payments advice and nearly half cite currency fluctuations as a top concern for financial risk. Yet more than half (54%) do not protect themselves from risk when trading internationally, according to a survey by American Express.
“Small businesses tend to rely on friends and family for advice about operating their business, but when the financial stability and growth of your business comes into play, using a trusted international payments provider is critical,” said Brett Weinhouse, vice president and general manager of foreign exchange (FX) international payments, American Express.
Untapped Opportunity for US SMEs
Some 40% of the US businesses queried listed currency fluctuations as their number one worry; yet almost as many (37%) are equally concerned about ‘red tape’ and ‘legislation’ when trading internationally. In fact, 7% of US businesses polled said they were unsure how to work internationally versus 2% of their counterparts in the UK and just 1% in Australia.
Other key US results revealed by the survey include:
- The UK and Italy are the European trade capitals for SMEs in the US.
- Nearly one quarter (24%) of US SMEs spends less than one working day a month on managing their international payments, even though nearly one in five (18%) say that at least 50% of their business is international.
- The top currencies of concern for US respondents are the US dollar (55%), euro (20%) and Japanese yen (6%).
- Fifteen percent of US SMEs who say they do not manage risk claim this is because they are unsure of the benefits of hedging, and over one third (36%) think it’s because they do not make enough international transactions.
Global SMEs Lack Confidence in US Dollar
The US dollar is the number one currency concern for both US and Australian respondents, but number two in the UK, after the euro. Concern for the stability and strength of the US dollar is the (joint) top reason (42%) why confidence has decreased in international trade. Despite the currency concern, the US, UK and Australian markets believe that increasing international trade will help drive global economic growth.
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