In an interconnected world with intensifying competition, cross-border payments optimisation is the key to growing your business.
Two years of the pandemic did not go unnoticed. Lockdowns and restricted travel greatly affected our lives. Yet, some industries are thriving.
Businesses indeed experienced the pandemic hit, but not all – some are looking into the future with plans for expanding globally. This presents its specific challenges, including utilizing cross-border payments, which facilitates the flow of money between European buyers and sellers to the tune of €143 billion.
The Internet – the Land of Opportunities
Fortunately for us, we live in the internet era where everything is interconnected.
Now, when millennials take money management seriously and work from the bedroom or remote locations is the new norm, the time has come for online services to enter the next development phase.
Even those who prefer conventional methods and raise their voice against technology flipped. I have recently stumbled upon an article about a 91-year old English professor in the US with 50+ years of experience who started using Zoom to continue teaching students during the pandemic.
Well, the professor’s journey is similar to what businesses are going through right now – The dilemma between operating as usual and trying something new lives on. However, the current environment pushes companies towards the latter. After all, disruption is at every corner. Yet, those who pick innovation face a new obstacle – cross-border payment inefficiency.
Diving Deep into the Issue
Bureaucracy, legal and regulatory limitations have had a negative effect on cross-border payments, increasing the time of money transfers. Navigating such stresses and strains associated with this necessary evil is a big part of many business’ growth plans.
Banks and financial institutions (FI) with the established data exchange in one country might not have a counterpart in every region, meaning the funds have to go through multiple entities (up to four institutions) before ending up in the receiver’s account. For business, that means more bureaucracy – companies can be forced to provide papers with extra payment details, invoices, tax forms, etc. The list depends on the country.
xpate is in the same boat. Since quite a few members of our team work remotely, we stumble upon the same issues as other companies. We want to transfer salaries hassle-free without delays and search for a simple cross-border solution that takes speed and user experience seriously.
Fortunately, improvements are on the way. Despite lockdowns and limited physical communication that the Covid-19 pandemic brought along with it, opportunities are around the corner.
Remote working has become a pandemic driven trend, allowing businesses to save up on office spaces and switch to distributed teams. Many realized that potential employees could live in places outside of the company’s physical reach, which translates into access to a global talent pool.
Yet, once a company hires a remote team, it faces a well-known obstacle – cross-border payments. Global talent is excellent, but what are the ways to manage it and comply with cross-national transfer rules? Well, there is a way.
Transformations Are Coming
To combat the issue of cross-national transfers, G20 developed a roadmap developed by the Financial Stability Board in partnership with International Monetary Fund. The roadmap described necessary improvements and changes, such as the extension of working hours of settlement systems to approve country-to-country transactions in real-time. G20 warmly welcomed and endorsed the outlined initiatives.
Fintech companies that demanded improvements for some time are also alongside the regulatory bodies on this road to change. We, too, are frustrated by what should be a simple method of payment, which is instead hindered by friction.
Continuous development of cross-border payments is crucial to personal data. After all, the fraud risks remain high. Thus, businesses need new solutions that will keep them away.
Thanks to the world wide web, conventional life has been easy so far. Yet, bureaucracy stays the same; things do change but at a slow pace.
Lots of industries require solutions that can automate and simplify processes and paperwork – so why should cross-border payments be any different?
Globalization has given us tons of opportunities to explore. However, we still face the need for automation to turn manual tasks into self-fulfilling processes, allowing us to save time and enhance user experience.
The integration of APIs is great, but if banks and financial institutions improperly utilized them and payments platforms had to comply with outdated, bulky onboarding requirements that were in force not so long ago, consumers would have to suffer from delays and costs forever.
The time has come to give a hand to consumers.
Since the pandemic is ongoing, we believe the adoption of cross-border payments and the need for efficient cross-border transfers will only surge.