International payments, a strategic financial challenge for companies
In a world where trade is increasingly global, international payments play a key role in the world economy. According to McKinsey, the international payments market represents nearly $200 billion in transaction and foreign exchange fees, with average annual growth of 6%. This expansion is driven by rising international trade, the digitization of payments and the rise of fintechs, which are challenging the banks' monopoly.
Why are international payments so expensive?
Businesses face a number of obstacles that make cross-border payments costly and inefficient. Only 23% of SMEs are satisfied with their current cross-border payment solutions, reflecting the complexity of the system:
- Hidden bank charges: On average, companies lose between 2% and 5% of their transactions due to exchange rate margins and additional fees.
- Multiple intermediaries : Most payments go through several correspondent banks, adding costs and delays.
- Exchange rate volatility: In 2024, the euro lost 6.4% against the dollar. This instability can weigh on companies' cash flow.
- Processing times: Unlike near-instantaneous domestic payments, cross-border transactions can take up to five working days.
Optimizing international payments
Faced with these costs and inefficiencies, companies need to optimize their international payments. The emergence of new solutions, notably fintechs, is making it possible to drastically reduce these costs, accelerate transactions and secure financial flows.
In this article, we present six proven strategies for reducing the cost of your international payments, improving your competitiveness and strengthening your cash flow.
The problem: hidden costs that squeeze margins
Companies making international payments are often faced with high, non-transparent charges. Traditional banks apply multiple costs:
- Fixed transfer fees for each transaction, often around €20 to €50 per transfer.
- Margin on the exchange rate, which can represent up to 3% of the amount exchanged, although this is not always clearly indicated.
- Intermediary costs, when payments pass through several correspondent banks before reaching the final recipient.
According to a McKinsey study, these fees can add up to as much as 5% of the total amount of a transaction.
The solution: compare and negotiate actively
To reduce these costs, companies must :
1. Compare offers from banks and fintechs: Banks often apply opaque pricing structures, whereas new payment solutions offer more transparent terms and conditions.
2. Negotiate costswith your bank: Large companies can ask for reductions in fixed costs and better exchange conditions, but this is more complex for SMEs.
3. Analyze the currencies used: Some service providers offer more advantageous conversions on certain currencies, depending on the volumes traded.
Choose solutions with no hidden costs
Opting for service providers who clearly display their rates helps avoid unpleasant surprises. Keewe, for example, operates with no transfer or management fees, and offers a competitive and transparent exchange rate spread to optimize every transaction.
The problem: a rigid and costly traditional banking network
The SWIFT network, used by the majority of banks for international payments, adds intermediaries between sender and beneficiary. This results in :
- Additional charges applied by each intermediary bank.
- Extended lead times of up to five working days.
- Lack of transparency on final charges to the recipient.
Fintechs and new international payment platforms make it possible to avoid these costs by offering more direct and optimized transactions.
The solution: more competitive alternatives
1. Fintechs like Keewe can reduce transaction costs by 30-50% compared with traditional banks (McKinsey).
2. Direct and local payments bypass correspondent banks, speeding up transactions and reducing costs.
3. Multi-currency accounts offered by platforms like Keewe enable payments to be made without automatic conversion, eliminating high bank margins.
Keewe, a solution for international companies
- No hidden costs: a 100% transparent model.
- Competitive exchange rates: Keewe surveys a multitude of financial providers and selects the most competitive rate for the transaction.
- Free payments : all interbank transfer charges are absorbed by Keewe.
By integrating a solution like Keewe, companies gain visibility over their payments, reduce costs and improve cash flow.
The problem: currency fluctuations add to the bill
Exchange rate fluctuations can have a significant impact on the final cost of international payments. A currency that appreciates between the time a contract is signed and the time payment is made can represent a significant loss for the company.
In 2024, the euro fluctuated by more than 6% against the dollar, a volatility that directly affected exporting and importing companies. Just imagine a 1% drop in the euro exchange rate: if the payment is €100,000, this variation could represent a loss of €1,000.
The solution: anticipate and fix your exchange rate
1. Plan payments at the most favorable times: Monitor market trends to identify the most advantageous periods.
2. Use forward contracts: These contracts fix an exchange rate in advance, thus protecting against market fluctuations.
3. Rely on solutions like Keewe: Keewe offers the possibility of securing an exchange rate, thus avoiding unpleasant surprises and enabling better cost management.
The problem: intermediaries inflate costs
Each intermediary involved in a cross-border payment charges its own fees, which can quickly add up to the total cost of the transaction.
According to the IMF (International Monetary Fund), the costs associated with banking intermediaries can represent up to 50% of the total costs of an international payment, depending on the geographical corridor.
The solution: opt for local payments
1. Reduce the number of intermediaries by relying on partner banks in the target country: This avoids unnecessary costs associated with correspondent banking.
2. Use solutions like Keewe: Keewe allows you to pay directly in local currency, eliminating unnecessary conversions and associated costs.
The benefits of this approach :
- Reduced costs : Fewer intermediaries means fewer fees to pay.
- Increased transparency : Elimination of unexpected costs applied by correspondent banks.
- Faster transactions: A local payment is often processed faster than a conventional international transfer.
By opting for solutions like Keewe, companies can significantly reduce the costs associated with cross-border payments, while benefiting from greater efficiency and transparency.
The problem: manual management, a source of errors and costs
International payments are often handled manually, leading to errors, delays and high processing costs. The multiplication of transactions and currencies makes accounting and financial management even more complex.
According to McKinsey, companies that automate their payments reduce their processing costs by 30-50% and gain in operational efficiency. By automating, they limit human error, avoid late payments and optimize cash management.
The solution: centralize and automate payments
1. Consolidate and optimize international payments: Centralized management avoids redundancies and optimizes financial flows.
2. Use the right solutions : Platforms such as Keewe enable you to manage multi-currency payments with instant conversion and real-time tracking.
3. Greater efficiency and transparency : By automating payments, the company reduces the administrative burden and minimizes the risk of error.
Example: Keewe, smooth, automated management
Keewe offers an intuitive interface for centralizing payments, simplifying currency management and automating transactions. Thanks to its advanced functionalities, companies can optimize their cash flow and reduce processing costs.
The problem: polluting and costly international payments
In a world increasingly focused on ecological transition, companies must also take into account the carbon footprint of their international payments. Few players are aware of this, but international trade accounts for 58% of France's greenhouse gas emissions.
The solution: integrate more sustainable alternatives
1. Measure the carbon footprint of payments: Adopt tools that track the environmental impact of transactions.
2. Redirecting a portion of fees to green projects: Keewe offers an innovative approach with its Green FX offer, which donates 15% of transaction revenues to green initiatives chosen by its customers.
3. Optimize financial flows while reducing environmental impact: Responsible payment management becomes an argument for differentiation and reinforces a company's CSR policy.
Benefits of a Green FX strategy
- Cost reduction by optimizing the carbon footprint of payments.
- Environmental commitment promoted to partners and customers.
- Optimizing brand image and reinforcing ESG criteria.
International payments are a strategic issue for companies, but they don't have to be a source of excessive cost or complexity. Thanks to the six strategies discussed in this article, you can significantly reduce costs, optimize currency management and secure transactions.
Keewe stands out as the ideal solution to these challenges:
- Free, fast and optimized payments.
- Transparent, competitive exchange rates, accessible in real time.
- Access to over 150 currencies, including exotic ones.
- A Green FX solution that turns every payment into an ecological lever.
Opt for more efficient, transparent and responsible international payment management with Keewe.