How transparent are your international payments?
As an organisation you face regular challenges – the transparency of your international payments should not be one of them…
Part of living in the information age means we’ve got used to having the answers to almost all of our questions readily available. However, despite the explosion of big data the world of business payments – particularly cross-border business payments – has yet to catch up. So what are the key issues and how can you make sure your international payments are as transparent and efficient as possible?
What are the main issues with international payments?
Lack of visibility
Once a payment has been sent it is not always easy for the sender to track its status. In fact, on the current payment rails used for cross-border payments, most information is one directional. The lack of visibility of a payment as it travels to its destination can make it difficult to pinpoint problems when they occur.
Not enough data
When an error happens an investigation is usually opened to find out what went wrong. This can be difficult if there is not enough data available to be analysed. The sender can have a painful experience trying to get their payment provider/s to give them all the relevant information in a reliable and timely fashion.
Multiple organisations involved
One reason international payments are complex is because they generally involve foreign exchange conversions and each payment can hop between many intermediaries. This means that when errors do occur it may be difficult to identify where the problem started.
High intermediary fees
International payments also tend to be more expensive, as the intermediaries typically charge fees for allowing payments to travel through their systems. These fees sometimes are taken from the payments, resulting in the final amount received being less than what was sent. In addition, the more stops a payment makes the longer the payee waits to receive it.
How can international payments be more efficient?
With so many intermediaries, international payments are not as quick or accurate as senders and recipients would like. By working to make payments more transparent, and reducing the number of intermediaries, the process can become much more efficient.
Within the industry, the current focus is on the following:
New technology is making it possible for more visible payments. Both senders and recipients are welcoming a more data-rich environment. Payment providers are leveraging faster payment rails and strengthening communication to and from the rails.
Read more about current innovations
One driver behind these technology advances is the rise of the financial technology Fintech firms. These companies are using application programming interfaces (APIs) to improve the speed of delivery and make the flow of funds more transparent. API-driven architectures are user-friendly and allow systems to communicate seamlessly with each other.
Blockchain technology is another driver. For payment providers, blockchain typically reduces the number of intermediaries in the flow of funds, as senders and recipients typically have direct relationships. This usually results in faster and more accurate payments.
Find the payment providers for your business
Choosing the right payment provider is very important when your business relies on international payments.
When selecting a payment provider ask them:
To avoid problems with speed, hidden fees and lack of visibility, ask about the provider’s systems. For example:
Is there a module that provides the ability to track payments with real-time status updates? For example, can you see each payment travelling along its specific payment rail?
Talk to us about your international payments
If you’d like to talk about making your cross-border payments more efficient, speak with one of our specialists. We can help you stay ahead of the curve when it comes to transparency and speed.
Have you read our complete guide to international payments?
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