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International Money Transfers Ways for SMEs
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International Money Transfers Ways for SMEs


Software eats the world! And it’s also eating money. Or at least it’s changing how money is spent, sent, and received. For small businesses, that’s good news.

SMEs suffer from high international money transfer costs

The cost of transferring money is an issue for small and medium-sized enterprises (SMEs) involved in international trade. While big corporations usually have better access to banks, better deals, and more ways to shift money internationally at lower costs, SMEs bear the burden of an expensive and inefficient international money system.

Traditionally, SMEs had to work with banks in foreign trade. When sending money, they have two major costs: First is the fees for international money transfers. Second, the currency conversion fees.

Often it’s especially the currency conversion where banks charge SMEs a lot of money. These costs are more “hidden” than the fees; as they are charged percentage-wise, they rise with higher transaction amounts.

Woman paying for her online purchase

Fintech and cryptocurrencies 

But times are changing: SMEs now have ways to circumvent the traditional banking system. One way is to work with fintech like Wise – formerly known as “Transferwise.” 

Wise charges fees per transaction that might be higher or lower than bank fees. However, Wise settles transactions at the real market rate, meaning customers pay only the fees and no currency conversion. Mostly that makes the transaction cheaper than through the traditional banking system.

Another way is cryptocurrencies. Those currencies are not sent through banks but through decentralized blockchains. As a result, there are no banking fees to be paid.

The risk with cryptocurrencies like Bitcoin or Ethereum is their volatility. Prices might change, and SMEs might have to settle at a loss. However, SMEs could use so-called Stablecoins tied to an underlying asset like the US dollar. With stablecoins, SMEs can make international transactions at a very low cost and without the risk of volatility.

The thing to keep in mind is that, at one point, crypto money would have to be exchanged back for fiat money to use in the real world. Most exchanges will charge money for that. However, for most SMEs, the cost would be considerably lower than paying for international money transfers through the banking system. 

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