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Almost every new presidential administration brings with it fears about the way new policies will impact people’s day-to-day lives. One potential policy of the current administration is causing major consternation: On the campaign stump, President Trump spoke of taxing or prohibiting remittances to Mexico. As a result of these fears, remittance payments have skyrocketed in recent months — Banxico, Mexico’s central bank, reported an eight-year high of $2.5 billion in remittances in March of this year. Remittance sending grew over fear that it would become even more difficult to send money to and from Mexico in the future. These fears also extend to and affect small-business owners.
As the CEO of a small business that works with a wide network of other small- and medium-size businesses (SMB), I interact daily with other small-business owners. One difficulty many of them encounter is sending cross-border payments to other businesses — suppliers, customers, partners, etc. News that an administration might alter the tax landscape of international payments catches their ear. In particular, I am reminded of the story of Joey Angeles, the manager of the Jordan Tourism Board in North America.
The aim of the Jordan Tourism Board, which spans both private and public sectors, is to create and implement marketing strategies that expand Jordan’s tourism potential worldwide. Joey’s job is to promote Jordan as a destination, which includes doing business with partners in Mexico, as well as in the United States.
Joey found it very difficult to send money to those partners in Mexico. Anti-money-laundering controls and strict Mexican banking policies made sending money south of the border difficult to begin with, but issues with payment vendors in addition to those inherent problems made it difficult for the Jordan Tourism Board to accomplish its daily tasks. The possibility of more restrictions imposed by an American administration offered an ominous future for Joey’s livelihood.
Indeed, it wasn’t just Mexican financial institutions weighing down the Jordan Tourism Board’s payment options. Even Citibank made it difficult to track exactly where payments to Mexico were in their progress between the two countries. Often, Joey would discover that the payments weren’t going through at all. Citibank blamed the receiving bank in Mexico and told him to try again. More often than not, Joey would end up asking for a full refund. A cloudy political future in the U.S. was introducing strain onto his partner relationships.
Even traditionally reliable methods for sending checks became risky stopgaps. Mexican customs routinely held FedEx checks, and Western Union capped (at too low a dollar amount) the amount of money he could send. I remember thinking about how the policies — or even the shadow of potential new policies — can affect the tasks many small-business owners must accomplish in order to keep their ventures running. When Joey told me he even considered sending money vial snail mail, I almost laughed. SMBs are the backbone of global trade, and many of them encounter regular difficulties paying their bills or receiving payments.
When a small business like the Jordan Tourism Board pays about 50 invoices ranging from $1,400 to $6,000 per year to companies in Mexico, navigating the murky waters of international policy becomes a $30,000 proposition. That total doesn’t include the numerous bank fees associated with sending money across international borders. Worse, many small-business owners like Joey have no visibility into where their money is at any given time during the transfer process.
The idea that policy change may create even more stringent restrictions on sending money internationally casts a shadow over small business owners’ heads. I work with many owners and CEOs of startups and mom-and-pop shops who stay up at night wondering if their business is going to keep running. The last thing they need is an additional barrier to earning their living.
When I consider Joey’s story, I become frustrated. But I am also hopeful that the future small businesses like his are building will help negate these types of policy changes. Eventually, technology trumps (no pun intended) policy changes — Uber and Airbnb exist in other countries and multiple cities and states, despite a wide range of political leanings in any given jurisdiction. SMBs continue to support globalization, the tool the global economy needs to continue to grow.
In our technology-driven future, isolationist policies won’t keep the Joeys and Jordan Tourism Boards of the world from understanding where their payments are or from sending and receiving money altogether. I think the underpinning moral arc of Joey’s story is that individuals and small businesses should not suffer as a result of administrative transitions within any government. Each and every country of the world relies on SMBs to innovate and provide GDP growth; we must all continue to work together to ensure this vision can become a reality.
Marwan Forzley is the co-founder and CEO of Veem (formerly Align Commerce), a next-generation platform that simplifies global business payments with its unique multi-rail technology. Prior to Align Commerce, Forzley founded and served as CEO of eBillme, an online payments solution that extended online banking to the merchant’s checkout process. After selling eBillme to Western Union, Forzley joined Western Union’s digital team as general manager of e-commerce and strategic partnerships. Reach him @forzley.
This article originally appeared on Recode.net.
