Cross-Border Payments: Why Performance Is Redefining SMB Provider Loyalty

A report by PYMNTS Intelligence and Mastercard found that 57% of U.S. small- to medium-sized businesses (SMBs) sourced from international suppliers in 2025. While traditional banks serve 64% of these firms, more than one-quarter of internationally active SMBs are highly likely to switch providers, signaling that operational performance now outweighs institutional incumbency.

How many U.S. small businesses are sourcing globally?

International commerce is no longer the exclusive domain of large enterprises with expansive procurement teams. According to the PYMNTS Intelligence report, “The Cross-Border Opportunity: What Global Sourcing by US SMBs Means for Payment Providers,” 57% of U.S. SMBs utilized international suppliers in 2025.

This trend is even more pronounced among mid-sized firms. For businesses generating between $1 million and $10 million in annual revenue, nearly three-quarters now buy across borders.

Payment providers initially viewed this shift as a growth tailwind. Increased sourcing typically leads to higher transaction volumes, more foreign exchange activity, and a general rise in total payments volume.

Why are SMBs likely to switch payment providers?

Despite the growth in volume, loyalty is fracturing. More than one-quarter of SMBs active in international trade stated they are highly likely to switch their payment providers.

These businesses aren’t casual users. They are among the most internationally engaged companies in the SMB segment, meaning their willingness to leave indicates a fundamental change in how they value financial partnerships.

Historically, providers maintained relationships through account ownership. If a bank held the operating account, the business stayed. Now, providers retain these relationships through execution.

The report identified faster payment processing and settlement as the primary areas for improvement. This isn’t just a preference for speed. It’s a requirement for operational reliability.

Cross-border payments are tied directly to inventory management, production schedules, and supplier relationships. A late domestic payment is an inconvenience. A late international payment can disrupt a production run or delay a critical shipment.

Is the U.S. dollar masking a need for more currency options?

Nearly two-thirds of internationally active SMBs primarily pay their overseas suppliers in U.S. dollars. While this might look like satisfaction with the current system, the report suggests otherwise.

Many SMBs use dollar-based payments not because they are optimal, but because they are the only options available. As these businesses deepen their international ties, they encounter local market realities and supplier preferences that a dollar-only model cannot satisfy.

The report warns that providers risk assuming current behavior reflects future demand. Experienced SMBs are increasingly seeking capabilities that go beyond basic money movement, including broader currency coverage and support for local payment methods.

How are FinTechs challenging traditional banks?

Traditional banks still hold the largest share of the market, serving 64% of internationally active SMBs. However, the report found that FinTech providers are gaining market share while earning some of the highest satisfaction ratings in the industry.

Performance is displacing incumbency. Cross-border payments were once considered a “sticky” business because the disruption of changing providers outweighed the benefits of a better service.

That calculation has changed. Cross-border payments are no longer a retention moat for banks; they have become a competitive battleground.

While the data doesn’t suggest banks are losing the market entirely, it indicates that payment performance is now a primary measure of whether a provider delivers enough value to justify the relationship.