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4 Eurogiro News

How posts can make foreign exchange a key competitive advantage for SMEs

www.business.westernunion.com [email protected]

Over the centuries, this process has gradually gathered speed - and began to accelerate at an exponential pace in the late 20th century. Political changes lowered trade barriers and technological advances dramati-cally reduced the cost of moving goods and services across the planet – putting business-es in the farthest reaches of Mongolia on a more competitive footing with rival businesses in North America.

As the playing field became increasingly levelled, it also became much larger. Billions of people entered the global economy for the first time, and millions of businesses sprang into existence to serve their varied needs. Businesses became increasingly specialised, delivering highly specific services, arbitrating international cost advantages and exploiting unique niches in supply chains in order to achieve success. They have also become profoundly global in nature. Increasingly, these businesses are located in, sourced from, and selling to the developing world. This means that there is often a mis-match between their economic capabilities and the financial environments in which they operate. Countries with a less developed financial in-

frastructure can impose severe limitations on the ability to grow internationally – and this means that there is a growing need for financial intermediaries with the requisite local relationships, expertise, and scale necessary to support businesses as they expand into global markets.

According to Western Union's research, many of the businesses surveyed had experi-enced issues making cross-border payments with their current providers, including a lack of 24X7 access, difficult-to-use online pay-ment platforms, exchange-rate risk and lack of expertise and lack of transparency in the payments process.

In addition, according to a report issued by independent research firm Aite, many small businesses reported that their current pro-vider of the service did not understand their needs in making cross-border payments. The research has also found that many SMEs don't feel their current international payments provider offers the products and services they need, or an easy-to-use online banking application. In many senses, post offices possess unrivalled advantages over tradi-tional banking and logistics firms. With far-flung outposts and deep relationships in local communities, they are able to reach places that other organisations cannot.

Many are already leveraging this footprint, rapidly moving beyond traditional ship-ping functions and broadening their service offerings into the financial sector. In many countries, post offices take deposits, provide financing, and handle payments. According to figures recently published by the World Bank, more than 7 in 10 countries use postal organisations to deliver financial services - and the ratio is even higher in the developing world. In places such as the Russian Federa-

tion, more than 80 per cent of all domestic payments are sent through post offices. Unfortunately, businesses have often not benefitted from this. The inefficiencies thus generated can impose a very real cost on enterprises – and in countries with controlled currencies or highly volatile exchange rates, trading relationships become dangerous, expensive and unpredictable.

With Western Union Business Solutions services, SME customers can access lo-cal, personalised services with the help of experienced foreign-exchange professionals. In addition, businesses can make interna-tional business payments online in more than 140 currencies, 24 hours a day, 7 days a week. “The service is dedicated to reducing SMEs exposure to currency fluctuations and increasing its competitive advantage with an effective risk management plan. FX specia-lists monitor currency rates and communicate with clients in order to deliver competitive pricing, protection, and optimised trading for their business” says Jonathan Knaus, Vice President Agent Sales & Implementation at Western Union Business Solutions.

Postal networks sit at the inter-section between commerce and trade – and by partnering with foreign exchange specialists, they can offer the advanced tools and specific expertise necessary to move money globally, manage currency risk, and capitalise on mar-ket opportunities. Postal organisations occupy a unique niche in the world of trade – and they are uniquely positioned to help equally specialised businesses reach out to the world. Unprecedented opportunities beckon. 3

With Western Union Business Solutions services SMEs have access to personalized service of foreign-exchange professionals

The story of economic progress is one of increasing specialisation. The posts around the globe have progressed to leverage their unique position to offer new services. Unfortunately, much of this progress has remained confned to the consumer market. Businesses have been forced to rely on fragmented domestic banking networks, and have had limited access to international payment infrastructure. With Western Union Business Solutions services, SME customers can access local, personalised service with the help of experienced foreign-exchange professionals