Without imports, South Africa’s electronics sector would be almost non-existent. Outside of a few niche items such as printed circuit boards (PCBs), electronic components, and some specialised equipment, almost everything else is manufactured elsewhere. Even when an item is assembled locally, it’s usually with imported components. In fact, Sars figures show that the country imported some R3.34 billion worth of machinery and electronics in September 2023.
That means that businesses of all sizes in the sector have to deal with international payments. Whether it’s a big firm supplying specialised components for specific industries or a one-person shop building custom PCs for local gamers, all would have had to navigate foreign currency exchanges.
While that’s not a massive headache for businesses that have to undertake small, occasional imports, things can quickly get more complex. And the more a business imports, the more complex things can get. If you’re in the electronics sector, chances are that’s not the kind of complexity you want to deal with. That means finding an international payment provider capable of making those payments as smooth as possible.
Look beyond your bank
For many electronics importers, the temptation would be to simply use the same bank that holds their business accounts for their international payment needs. That’s understandable. Most banks have international payment capabilities and for the businesses that use them, the interfaces are familiar. But anyone who tries to go this route will realise how quickly a decision designed to make life easier can backfire.
One of the biggest issues with banks lies in their customer experience deficiencies. Even if a business somehow manages to navigate the online options for international payments, chances are they’ll have to call the contact centre at some point. That, in turn, means long queues waiting to speak to a representative. There’s also a good chance that the business will have to go through multiple representatives before it eventually finds the right person to talk to.
That’s frustrating at the best of times but it’s especially so if you’ve got a large shipment of electronics you need to pay for before it’s shipped. But it’s also not the only area where banks fall short on customer experience. Another area where they frequently fall short is in assisting businesses with the forms they need to be compliant with SARS and the Reserve Bank. Especially with a constantly evolving set of import requirements from a regulatory point of view, for example the new APN requirements effective from 1 December 2023.
But the lack of effective service from the banks isn’t the only issue. Banks often overcharge importers quite significantly by providing a heavily unfavourable exchange rate on international payments, typically leading to additional costs in the tens of thousands of Rands per payment. Given how high import tariffs can be, no electronics business would want those additional unforeseen costs.
The right kind of partner
Electronics importers should instead look for an international payment partner that places a premium on customer experience and transparency.
From a customer experience perspective, businesses shouldn’t accept anything less than a dedicated account manager who can help them with all of their currency exchange needs. That account manager shouldn’t just be a customer service representative but should have an in-depth understanding of the nuances of your business and also have the expertise to help with any query, including those around regulatory requirements from SARS and the Reserve Bank.
Another way international payment providers can demonstrate an advantage over banks is through automation. Even something as small as automating the onboarding process required to move money internationally, or automating the forms that need to be populated when sending a payment abroad can save businesses a lot of time and stress.
Finally, for any international payment provider to stand out against the competition, it has to be transparent. Adopting transparency as a key part of the provider’s ethos has a couple of benefits. The first is that it ensures that customers always know what they’re going to pay for a particular transaction. The second is that it can demonstrate to customers that it’s possible to get better service than from the banks while still paying less than they charge.
Delivering value down the line
With inflation and a weak rand driving up import costs all the time, businesses in the electronics sector must work harder than ever to deliver value to their customers. By utilising independent international payment providers that place a premium on customer experience and transparency, they can ensure they’re in the best possible position to provide that value.
By Harry Scherzer, CEO, Future Forex
