As small to medium-sized businesses (SMBs) in the United States extend purchasing beyond domestic markets and assemble supply chains across several countries at once, the mechanics of moving money across borders are becoming part of procurement strategy itself, shaping cost visibility and cash timing.

Money movement also inspires confidence between trading partners, which was the backdrop of a conversation between PYMNTS and Mike Kresse, executive vice president, commercial and new payment flows, North America at Mastercard, alongside PYMNTS Intelligence findings examining how U.S. SMBs manage international sourcing.

The report found that 57% of U.S. SMBs purchase goods and inputs from overseas suppliers, underscoring how international commerce has moved beyond large enterprises. Among firms generating between $1 million and $10 million in annual revenue, global sourcing reached 73%.

The operating model of small businesses has evolved more quickly than the infrastructure supporting payments, Kresse said.

“What we need to see is that cross-border payments become just as easy as ‘me sending you money’ in a peer-to-peer payment or just as easy as a checkout experience in a normal consumer transaction,” he said. “We need to see that same level of seamlessness brought to bear with really a focus on keeping it simple and removing the mystery around cross-border money movement.”

Small businesses frequently encounter friction at the point of payment, he said. A supplier may provide Swift instructions that are unfamiliar. Costs can remain unclear until settlement. Collection economics may shift after conversion fees. Businesses are often left deciding whether to transact through a bank, FinTech provider or another intermediary.

The issues that small businesses run into are driven by the underlying complexity of making cross-border payments, Kresse said. “Each corridor brings its own banking rails, its own currency rules, its own fees, its own settlement.”

That fragmentation becomes more visible as supplier networks expand across geographies. The research identified China, Canada, Mexico, the United Kingdom and the European Union as major sourcing destinations, although sourcing patterns vary by company size.

From Faster Payments to Better Commercial Relationships

One of the clearest examples of the trade-offs facing SMBs appears in currency choice.

According to the research, 63% of internationally active SMBs pay overseas suppliers primarily in U.S. dollars, while only 4% predominantly pay in suppliers’ local currencies.

Kresse said the preference is understandable because it simplifies accounting, but it can introduce uncertainty elsewhere.

“Operationally, if you’re in the shoes of a small business, it’s easier to think about making payments in U.S. dollars,” he said. “But the reality is there’s FX conversion risk and FX conversion costs.”

Paying locally can improve predictability and reduce situations in which suppliers receive less than expected after conversion, he said.

Speed remains an important expectation, but Kresse described it as only one element of a broader equation. PYMNTS Intelligence found that 43% of SMBs identified faster processing and settlement as the top area for improvement.

“Speed is table stakes,” Kresse said. “But it really is only the starting point.”

He pointed instead to transparency, payment visibility and the ability to attach meaningful transaction data that helps suppliers reconcile payments more efficiently.

That expectation helps explain another report finding that 91% of SMBs use FinTech partners for cross-border payments and rate those experiences positively. Kresse attributed much of that preference to straightforward interfaces and clearer payment journeys rather than to provider type alone.

The competitive question is increasingly practical, he said. One in four internationally active SMBs sourcing heavily abroad indicated openness to switching providers. Once payments become difficult to track, slower than expected or more expensive than anticipated, payment execution starts influencing supplier confidence and working capital decisions.

“When payments end up becoming a bottleneck to cash flow or to those supplier relationships, that’s when businesses really start hunting,” Kresse said, adding that “providers can take that as an opportunity to provide a much more holistic, much more transparent view into cross-border payments.”