Brazil, Russia, India, China, and South Africa, otherwise known as BRICS, are the world’s fastest growing markets.
They are all very different, but have one resounding thing in common – they are emerging. That is, they are changing the landscape of the world’s economy right before our very eyes. So much so, in fact, that they account for nearly a quarter of the world’s economy today.
Pros and Cons of Expanding Globally
Each year, more and more businesses are choosing to globally expand their presence. And, with 98% agreeing that a global presence will be critical to having a relevant brand in 2025, it’s easy to see why they are jumping on the bandwagon.
Expanding from local, familiar markets to the global marketplace gives expanding businesses access to a wider range of clients, fresh talent, and greater opportunities. However, every advantage comes with a disadvantage, and it’s vital to weigh up the pros and cons to fully understand what your business is up against.
- New Markets
According to the U.S. Small Business Administration, 96 percent of the world’s consumers live outside of America.
Globally expanding your business means increased exposure to a wider pool of potential clients. And, with global growth comes the ability to continue expanding into new markets.
This helps your company negotiate better deals with distributors, as you don’t need to limit yourself locally, and it gives your business the chance to enter into new markets that might be a better fit for your product or service.
- Competitive Advantage
The ability to tap into the global market gives your business a unique competitive advantage over competition that doesn’t.
For example, if you are a marketplace that sells a product or service to the United States, China, and India, it instantly puts you ahead of competition that only serves clients in the United States. Benefiting from these growing markets can give your business the competitive edge you’re looking for globally and can set you up for years to come.
- Strategic Partnerships
Whether you want to form partnerships with potential clients, payout providers, or in-country experts, you’ll be able to receive top-tier advice from business professionals around the world with a global business.
Now that you are no longer limited to your own country, you can expand your expertise and receive expert insights on payment solutions, local labor laws, global competition, and business regulations. This alone can keep you one step ahead of local rivals and key competitors.
- Risk and Compliance Issues
It’s incredibly important to protect your business as it globally expands if you want to continue to grow in the future.
Financial crime is unfortunately very common all over the world, including international sanctions, money laundering, and PEPs (Politically Exposed Person).
Your business will also need to comply with the Patriot Act and other government regulations instituted by OFAC (Office of Foreign Assets). Having policies in place to comply with the local laws and regulations is vital for your business’ future.
- Currency Fluctuations
Entering new markets is a sensitive time. You need to take note of foreign exchange rates in every country you operate in. International business requires you to have a good sense of how your local currency is affected by fluctuations around the world, as well as the impact that has on your clients, business partners, and so on.
According to a cross-border payments study by Visa, countries like Switzerland and Hong Kong have developed new arrangements for the settlement of local payments in foreign currency.
- Time Differences
If you’re looking to expand your presence around the world, you need to know about time differences. For example, when you’re taking a lunch break at 12pm in New York City, people are already leaving work at 6pm in Cape Town. Because of this, global businesses face the issue of payment guarantees.
In Visa’s study, it was revealed that most payment systems are based on local laws and practices within existing domestic banking and financial structures. Time differences can make it tricky for an international business to coordinate teams and processes, which can have a negative effect of daily productivity and sales.
How Can Transpay Help My Business Expand Globally?
Now you know the pros and cons, you can work out whether your business is in the right place to expand globally.
Think about whether you have the necessary resources to prepare for any payment challenges and, if not, what’s the best solution?
With Transpay, we give your business the ability to stay protected from risk and compliance issues, currency fluctuations, foreign exchange issues, timing problems, and more.
We manage our own treasury operation, which allows us to send transactions at competitive rates without extra fees. Plus, we show you live rates for over 1,000 currency pairs. We pay your recipients the way they want to get paid — quickly and directly, through local bank transfers or cash pickups, solving your problem of timing issues.
With our in-house compliance team, we ensure that all transactions follow a strong and well defined global anti-money laundering (AML) program. Our standards include maintaining appropriate levels of “Know Your Customer,” suspicious activity monitoring, and comprehensive sanctions screening across major known sanctions lists and an internal watch list. We expertly navigate challenging regulatory environments, while adhering to the strictest AML/KYC and counter-terrorism financing policies and regional regulatory requirements. This protects your business not only in your headquartered country, but around the world as well.
The consequences of regulatory violations, fraud losses, currency fluctuations, and timing issues can be steep. Failure to comply with local government regulations can result in fines and regulatory penalties that may compromise your ability to do business.
Many vendors talk about the challenges of global currencies and compliance protection, but with a cross-border payout specialist like Transpay, it’s possible to take the challenge out of this process all together.
Transpay is a service from Transfast, a leading global payments company with more than 30 years of operating history. Transfast processes over $8 billion USD in annual payment volumes. Transpay provides businesses of all sizes with a scalable, secure, and fully compliant cross-border mass payout solution, making it easy to send funds directly to the local bank accounts of vendors, business partners, freelancers or others, reaching over 95 percent of the world’s bank accounts. To learn more, visit www.transpay.com.