Why cross-border payments are critical for Europe’s small businesses still struggling in the pandemic’s aftermath

August 22, 2022 | By Ellie Lewis

It’s been a volatile few years for small and medium-sized enterprises (SMEs), those intrepid companies that form the backbone of Europe’s economies.

The unprecedented disruption introduced by the Covid-19 pandemic has realigned global economics, and many small business owners have started looking more keenly towards prospects in new markets. With small businesses in Europe and beyond growing their international customer and supplier networks at pace, especially online, Mastercard’s second annual Borderless Payments Report has revealed just how critical cross-border payment services have been, and will continue to be.

With physical borders sealed tight and varying lockdowns impacting suppliers and customers in varying markets, cross-border payments have helped to keep millions of small businesses afloat.

International expansion offers hope for small businesses

Whilst it’s been a challenging time for small businesses, there are also opportunities on offer as the global economy resets. To inform the Mastercard Borderless Payments Report 2022, we surveyed more than 3,000 SMEs in 15 markets, including the UK, France and Germany.

Respondents were asked to share information about their preferences for cross-border payments over the past year including how frequently they used services and their opinions on the services they used.

The findings reveal that, whilst some small businesses are understandably concerned they will never hit pre-pandemic revenue levels again, digital growth and international sales opportunities do offer a real ray of hope.

Globally, two in five (44%) small businesses fear they will never achieve the same revenue levels as before the pandemic. Drilling down into Europe, half of French small business owners (50%) expressed these concerns, with the figure standing at 37% in the UK and 32% in Germany. That said, it’s worth noting that 49% of SMEs in France are now earning more money than before the pandemic, which is higher than the global figure of 44%.

In total, 75% of SMEs (62% in the UK) had to make changes to their business model during the pandemic to ensure survival, and 64% (55% in France) say the pandemic has changed the way they will do business forever.

The pandemic has significantly accelerated digital transformation across the world. Seven in ten (68%) small businesses are now doing more trade online. Though the figure is higher in South Africa, Asia, the US and South America, this is also a significant trend in Europe (53% in France and Germany, and 49% in the UK). And 55% of SMEs in France, 52% in Germany and 37% in the UK have seen their online sales grow.  

Over half (54%) of French small businesses (and around a third in the UK and Germany) say the pandemic has allowed them to source suppliers more competitively across borders, with 66% of the France’s small businesses now planning to source suppliers globally.

Providing the financial arteries for growth

As more of Europe’s small businesses expand internationally and come to rely on online sales to sustain their growth, cross-border payments provide the plumbing to connect these ambitious enterprises.

Business owners around the world were relieved that the global payment network remained resilient during the pandemic. At the outset of the Covid-19 crisis, businesses were worried that the system they relied on for international payment processing would break down under the stress. More than half (55%) of businesses we surveyed feared the global payment network would be more negatively affected by the pandemic, with many also worried that governments would restrict cross-border payments as a pandemic response measure.

Thankfully, none of those fears materialized, and most businesses agree that using apps and websites has helped them grow, improve cashflow and – ultimately - survive. Globally, 58% of small businesses (53% in France and 42% in Germany) are now making or receiving more cross-border payments than before the pandemic, and 43% are doing more business overseas.

Crucially, 66% of French small businesses say the cross-border payments network has allowed their business to survive, with the figure at 46% in the UK. Meanwhile, a third (34%) of German businesses would have folded during the pandemic if not for the income from international business and cross-border payments.

Looking ahead, 82% of small businesses in France now feel confident in using online cross-border solutions to send payments, and 78% of those in Germany are reassured by the security of cross-border payments.

But there is more to be done – much more. Despite the clear, and growing, importance of cross-border payments, there are obvious frustrations for small businesses.

At the global level, 67% of SMEs say if cross-border payments were faster they would use them more, with the figure at 62% in France and 44% in Germany.

Our research also found nearly half (45%) of French SMEs believe that cross-border payments slow down the supply chain at present (32% in the UK and 31% in Germany). A similar number (46%) of French SMEs also say there is no transparency about how much money is lost in foreign exchange and transfer fees, a sentiment shared by 27% of German small businesses.

It’s imperative that cross-border payment systems become faster, cheaper and more secure. Through partnerships with financial institutions in Europe, and around the world, Mastercard is empowering every business to address these issues and improve cross-border payments for both businesses and individuals. Mastercard Cross-Border Services allows people and businesses to send and receive money securely, and with upfront visibility of timings and fees to provide users with more confidence and predictability.

Our support doesn’t end there. Mastercard’s Small Business Digital Acceleration Program – available in several markets around the world – delivers new services, education and resources to help small business owners get online. These tools enable small businesses to quickly establish an online presence, protect their business against cyber threats, understand how to market in the digital space and much more.

And in the UK, Mastercard’s Strive UK program also supports micro and small businesses around the country to succeed in the digital economy through free guidance, helpful tools, and personalized one-to-one mentoring.

The full Mastercard Borderless Payments Report 2022 is available at:

Photo of Ellie Lewis
Ellie Lewis, Director, Mastercard

About Mastercard (NYSE: MA)

Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.  

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