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Exchange, Fraud Issues Dampen Cross-border Business For MSMEs: Survey

MSMEs have cited challenges related to high costs, exchange-related issues and concerns around frauds while doing business across borders, according to a survey. To overcome such issues, MSMEs have been partnering with third-party online selling platforms, developing their own websites and apps, digitising internally for online selling, and adopting a global payment system, said PayPal\’s MSME Digital Readiness Survey in partnership with Edelman Data and Intelligence.

\”98 per cent of the surveyed businesses have expressed an interest to invest in more payment options. Of this, 95 percent are looking to introduce newer ways of payment and 89 percent are keen on optimising card payments. This is followed by optimization of services to accept digital wallets like PayPal (70 percent),\” it noted. The survey was conducted between October-November 2021, and assesses the impact of COVID-19 on small businesses that have an online presence. The results are based on interviews with 250 business decision makers of India\’s small and medium enterprises, which are defined as having an annual turnover between Rs 5-250 crore.

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\”MSMEs have called out certain challenges associated with doing business across borders like high costs (74 percent), exchange- related issues (31 percent), and fraud-related concerns (30 percent),\” it said. The survey highlights the shift in consumer behaviour induced by lockdowns. It has paved way for purchasing from virtual stores. MSMEs have positively seen a 65 percent increase in online buying from customers and close to 80 percent shared that their consumers are more receptive to using different payments options, it observed.

The survey also found that the ease, accessibility and adoption of digital methods has led 51 percent of micro, small and medium enterprises (MSMEs) to see an increase in spending from existing customers while 46 per cent witnessed an increase in repeat purchases. Nearly all the Indian MSMEs surveyed agreed that cross border trade must be a business priority over the next year. Moreover, 86 per cent MSMEs selling globally claimed that they recorded growth in cross border trade during COVID-19, owing primarily to the reopening of other economies and positive sentiment from global consumers.


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Significantly, 52 percent of small businesses witnessed a positive impact on their business once economies began to reopen. In fact, 29 percent of MSMEs found that the business environment in India became more favourable for online sales and for 31 percent the cross-border opportunity was promising. The sample size of the survey endorses a mix of industry, mainly comprising the Services (36 percent), Production (28 percent) and Retail & Hospitality (16 percent) sectors.

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