While technology has made it easier for companies to do business beyond their home markets, many still face major profitability and efficiency challenges when it comes to overseas expansion.
International payments are generally more expensive than domestic payments, and the process can be slow and elusive, with limited visibility into fees and charges added by different banks along the way. Businesses can also be overwhelmed by compliance burdens and may have justified concerns about exposure to foreign currency fluctuations.
As Sam Fitzpatrick, Regional Vice President, Convera, explains, “Businesses that operate across borders need peace of mind that payments will be delivered accurately and on time, every time. Reliable international payments play a fundamental role in ensuring you develop strong relationships with customers, suppliers, partners, and even employees, which is all vital to the success of a business.
“At the same time, these businesses must ensure that international payment processes don’t eat up resources, or impact cash flow. There’s a lot to consider when choosing the right payments partner for your business. Fintech companies recognise this complexity and are stepping up to offer flexible, efficient payment solutions.”
So, what should your business look for in a cross-border payments provider? Here are some key things to consider when looking for a partner to help you manage international payments more efficiently.
Global reach and expansive currency capabilities
It’s essential to assess the size and reach of any potential payment provider’s global network, and their ability to meet your currency requirements now and into the future. A reputable provider should have a broad network of banking partners worldwide and the ability to make global payments look like local payments.
Although it may not seem necessary, this feature can help with the cost and speed of international payment processing by minimising the number of third-party financial institutions that your funds travel through.
An extensive financial network also means the provider will have the ability to facilitate payments in a wide range of currencies into local bank accounts. Whether your business transacts in major pairs or emerging currencies, this will ensure you know the cost of your payments in advance and assist with mitigating the effect of currency risk.
Scalability and integration
As your business grows so will your international payments needs. It’s crucial to choose a payments provider that can scale up with your business requirements. Consider whether the provider offers flexible solutions such as multiple payment methods (credit cards, bank transfers, e-wallets) and holding accounts that can help limit the conversions fees you incur.
Your provider’s payment solution should also seamlessly integrate with a wide range of accounting and ERP platforms such as PeopleSoft, Oracle. This provides the data insights you need to save time and resources when managing remittance, refunds, and cash flow forecasting.
Best-in-class compliance
Moving money around the world requires compliance with a wide range of local and foreign regulations and requirements designed to prevent money laundering and fraud. Licensed providers have both the compliance experience and the necessary licensing to meet your needs, and help you protect your business.
Ensure that your provider manages a comprehensive and pressure-tested Global Risk and Compliance Program that holistically addresses potential risks such as anti-money laundering, counter terrorist financing, fraud, sanctions, and conduct. They should proactively engage with regulators to remain aligned with regulatory requirements, expectations, and industry standards. and have a team of dedicated risk and compliance professionals around the world who are well versed in local requirements.
Efficiency through bulk payments
Ensure your provider can help you process multiple payments as efficiently as individual spot payments. This is important whether you’re already managing high volume payments for international payroll or pensions, or a growing business with the potential for payment volumes to significantly increase. Consider the provider’s infrastructure and technology, and whether it can handle high volumes without sacrificing speed or accuracy.
The best payment providers offer the ability to efficiently, and accurately process bulk payment uploads in multiple currencies, to multiple destinations via a single file upload. This frees up your resources to focus on other tasks and helps to minimise manual errors.
Work with an FX specialist
Currency fluctuation operates independently of business fundamentals such as forecasts and budgets – risk management and currency hedging can be useful tools for mitigating how this impacts your operations. The common misconception is that FX risk management is a strategy for large corporates, however the diversity of available tools means that any business dealing with foreign currencies can manage their exposures.
Stay focused on your core business by establishing relationships with a provider that specialises in FX and can support a currency risk strategy that fits your individual objectives. Markets evolve rapidly and most businesses lack the resources to stay abreast of developments. Working with a specialist in the field will help ensure your business gets up-to-date analyses of currency movements, and support for building a risk strategy that’s right for your business.
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