By Yishay Trif, CEO at MoneyNetint

Of all the comforting lies we tell ourselves, perhaps the biggest is that size doesn’t matter. Sure, we feel good telling ourselves that it’s the size of the fight in the dog that’s important, but how many of us actually believe it?

The truth is, size does matter. And in business, the bigger you are, the more advantages you have. Nowhere do we see this more starkly than in international trade, where global enterprises benefit from massive economies of scale compared to small and medium-sized enterprises (SMEs). 

Although SMEs make up around 90% of all businesses worldwide, they are woefully under-served by the world’s financial services providers. Banks, payment providers and electronic money institutions (EMIs) will happily create any number of bespoke foreign payment services for big businesses, or provide them highly advantageous rates of exchange. But when it comes to international payments SMEs are left out in the cold, often forced to make do with expensive consumer-grade transfer services like SWIFT when they wish to send or receive payments from overseas.

What’s particularly galling about this inequality is that it leaves SMEs unable to take advantage of today’s once-in-a-civilisation opportunity to harness the power of the Internet to trade with the world.

Emerging markets represent an incredibly lucrative business opportunity estimated at $100 billion every year. Yet because SMEs continue to be so poorly served by the world’s business banking sector, they can only watch as large enterprises seize every opportunity right from under their noses.

This isn’t the way things were meant to be. The Internet was supposed to usher in a new era of equal opportunities, where any SME with a website could theoretically compete on a level playing field with the biggest blue-chip brand. One of those SMEs is Israeli-based company Cashback.co.il, which saves people money on their online purchases through special deals, offers and coupons.

Cashback has grown rapidly since its foundation in 2015, but when the time came to expand internationally, it came up against the brick wall of international payments. “We targeted Brazil as our first foreign market, but there was no Israeli with an existing payment channel to the country,” explains the company’s co-founder Tomer Gooterman. “To provide rebates to Brazil-based customers and merchants, we therefore had to make do with a well-known consumer-grade money transfer service.  

“This just didn’t make any sense from a financial point of view, not least because these payments services aren’t geared towards businesses with a high volume of transactions. We ended up paying high levels of commission that cut deeply into our profit margins. In the end, it barely made financial sense to do business in Brazil at all.”  

If Cashback had been a large enterprise with millions or billions of dollars in revenue, its bank would likely have created a dedicated payment channel to Brazil. But because it was a new and growing company, such help simply wasn’t available. So much for the fabled “level playing field” and the limitless sales potential of the Internet. 

There are millions of SMEs around the world that find themselves in exactly the same position. But finally, help is available. A new generation of payments companies is harnessing new technologies including blockchain, while also forging partnerships with banks, payments networks and regulators in countries around the world to create new payments channels upon which any business, whatever their size, can piggyback.

This new breed of cross-border payments services owe as much to relationships as they do technology. At MoneyNetint, for example, we’ve just announced a new partnership with Banco Rendimento that slashes the cost of doing business in Brazil. And now that we have those relationships and integrations in place, any business can use it and start tapping into the huge potential of this emerging market.

For Cashback’s Brazilian operations, for example, we’ve been able to cut the cost of sending and receiving payments by over 50 per cent. But the benefits don’t end there. “Under the old system, we couldn’t pass the whole [foreign transaction] commission to our customers because our whole business is about saving them money,” says Gooterman. 

“That meant we had to swallow some of that cost ourselves. Now, we have increased margins which means we can pass this onto our customers through providing them with better deals, while giving us more spare cash to put towards customer acquisition. It’s completely transformed our relationship with Brazil and, we hope, with many more markets to come.” 

And that’s exactly how it should be. Big businesses have enough advantages as things stand, without an additional layer of international payments inequality. We should all welcome a world where businesses compete on merit alone, and size is no obstacle to success.