Why is Payment Agility Key to Expanding Internationally?

Insights from Vincent Folny, COO at Aria.

B2B payments can be a real headache. I know this firsthand. As the co-founder and COO of Aria for the past five years, I’ve encountered every kind of payment strategy imaginable. Delays, geographic complexities, currency exchanges– each added layer turns a simple process into a significant challenge. Yet, mastering this complexity is crucial for successfully entering new markets.

In this article, I’ll show you why payment agility is vital for international expansion. Rather than overwhelming you with theories, I’ll use a real example to illustrate the challenges you might face.

What are the challenges when entering new markets? 

Let’s consider a French company expanding to the UK. At first glance, the move seems straightforward: a mature market, a global language, and a strong economy. But the reality is far more complex, with three major challenges common to many of Aria’s clients.

Receiving payments in local currency

To operate effectively in the UK, you need the technical capability to receive payments in British pounds (GBP). Asking UK customers to pay in euros is neither ideal nor customer-friendly.

But even with the technical capability to handle GBP, there’s another challenge: determining the payment rails to use. You have two options: 

1. International payment to your French account via an international route (mostly SWIFT) in either EUR or GBP. However, this route often incurs high fees, hidden costs, regulatory hurdles, and unpredictable processing times.
2. Domestic payment to a UK account via local routes such as Faster Payments (FPS) or BACS. While this option is faster and cheaper, opening a UK account can take a minimum of two weeks and involves significant administrative effort.

Agility in payments lies in finding the balance between convenience, cost, and customer satisfaction.

Managing bad debt risks and solvency

When working with local customers, it’s easy to assess their financial health using familiar tools and procedures. But with foreign customers, how do you assess their solvency?

Data access and structure vary by country, with different sources (e.g. Pappers in France, Company House in the UK). Some data isn’t freely available, requiring contracts with local providers. In certain regions, establishing a local subsidiary may even be necessary.

Moreover, financial red flags differ across markets. A UK company might not recognize the significance of a “privilège URSSAF” in France, just as a French company might misunderstand a “Winding Up Petition” in the UK.

Let’s go even further and assume one of your UK customers fails to pay an invoice. You’ll face unfamiliar legal processes, requiring local attorneys and courts. This can be costly and time-consuming.

Being agile means anticipating these risks, integrating scoring tools, training your teams on local specifics, and implementing robust safety nets.

Financing foreign receivables

In B2B transactions, payments upon receipt are rare. This can strain cash flow as unpaid invoices accumulate.

If you’ve solved this issue in France with a factoring partner—great! But in the UK, you’ll need to find a new one and many providers require several million in monthly invoicing to start a collaboration. Unfortunately, there are no solutions available for the 0-to-1 stage, and you’ll have to navigate procedures and contacts that are unfamiliar to you.

This is where an agile strategy becomes essential, combining local partnerships and tailored financial tools.

Payments are at the heart of these challenges. Successfully receiving payments in local currency, securing transactions against the risks of bad debt, and maintaining healthy cash flow despite delays are crucial for thriving internationally. 

Now, imagine expanding to several countries simultaneously. Without the right strategy, it can quickly spiral into chaos. How can you go about it?

How to adopt agility and expand into new countries?

Let’s revisit the earlier challenges and explore concrete solutions to help you expand internationally with peace of mind.

Optimizing international payments

Accepting payments in local currency is essential. This starts with implementing a payment gateway that can handle multiple currencies and methods. For example, it’s crucial to accept local solutions like Faster Payments in the UK, alongside traditional ones like SEPA or SWIFT.

But tools alone aren’t enough. True agility requires flexibility in managing transactions– from setting triggers and customizing terms to redirecting payments. This level of customization enhances operational efficiency and ensures a seamless customer experience.

With Aria, you can streamline international payments via local routes without needing additional partners.

Managing credit risk and bad debt

Evaluating a client’s solvency requires accurate tools and reliable credit limits. At Aria, we’ve developed a three-pillar framework for superior credit management:

1. Access to trusted global ratings through partnerships with leading credit insurers.
2. In-depth financial analysis, including balance sheets and income statements, via specialized providers. 
3. Contextual and structural evaluations to understand the broader factors affecting a company’s financial health. 

This consolidated data allows us to categorize debtors, set financing limits, and determine appropriate pricing. Additionally, protecting against defaults involves credit insurance and optimized international collections processes.

Financing international invoices

Cash flow optimization is a major challenge during expansion. To address this, many businesses turn to international factoring, which allows for faster receivables financing or accelerated supplier payments to secure supply chains.

However, not all factoring solutions are equal. Traditional systems often impose high thresholds and manual processes. A more effective alternative involves integrated solutions that automate financing directly within your payment flows. 

At Aria, we leverage tech-driven solutions to manage both granularity and scale:

• Data integration with B2B platforms like marketplaces and SaaS allows the collection of vast amounts of data at a lower cost.
• Optimized digital underwriting reduces manual steps and speeds up approvals.

This is known as embedded invoice financing. It streamlines processes, reduces delays, and enables financing of smaller receivables.

Agility in payments requires preparation and adaptability. Here are the essentials:

• Centralize payment flows, support multiple currencies, and optimize your payment rails to minimize costs.
• Collaborate with experts who understand the nuances of your target markets.
• Invest in solvency tools and efficient processes to manage international disputes.

In the past, businesses relied on multiple tools for payments, financing, and collections. This led to friction, delays, and mounting costs. With a single, integrated solution, you can streamline your payment processes, automate financing, and manage credit risks more effectively.

That’s exactly what we do at Aria—simplifying your operations so you can focus on what matters most: international growth.