Kiwi small and medium-sized enterprises (SMEs) aspiring to expand internationally are facing steep hurdles, according to a recent survey conducted by global technology company Wise.
The study highlights significant barriers, including the cost of international payments, regulatory complexities, and New Zealand’s geographical isolation.
The research reveals that while 30 percent of SMEs are either already operating overseas or planning to do so, 42 percent cite international payment costs as their primary obstacle. Compliance requirements (41 percent) and New Zealand’s remote location (40 percent) also rank high among challenges. These issues are forcing many SMEs to rethink their global ambitions.
A major pain point for businesses is the lack of transparency in international payment fees. More than half (52 percent) of SMEs with global ambitions admit they do not fully understand the fees they are charged, and 8 percent are entirely unaware of these costs.
“Traditional banks are charging Kiwis a fee of anywhere from 3-5 percent of the total transaction amount when sending money overseas,” says Tristan Dakin, NZ Country Manager at Wise.
“These fees often include a currency exchange transfer fee and a hidden exchange rate mark-up. Without transparency, SMEs are unable to shop around for better deals.”
This lack of clarity is costly. Over a third (39 percent) of SMEs operating overseas report spending more than $5,000 annually on international payment fees. Some of these businesses have had to increase prices (41 percent), cut employee wages (23 percent), or reduce investments (36 percent) to offset these expenses.
Wise’s findings emphasise the need for more robust support systems to help SMEs navigate international expansion. While many businesses look to government or independent agencies for guidance, these resources are often underutilized after the initial stages of expansion.
“Demystifying international payments and regulatory hurdles is essential,” says Dakin. “Providing education on cheaper alternatives could save Kiwi businesses substantial costs and allow them to focus on growth.”
Wise’s call for change is echoed by the overwhelming sentiment among business leaders: 91 percent believe banks should be legally required to disclose their exchange rate markups.
As the global economy becomes increasingly interconnected, Wise advocates for transparency and improved resources to help New Zealand SMEs overcome barriers and compete on the world stage.
The Wise survey gathered insights from 533 New Zealand business owners and decision-makers in October 2024.
