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SMBs turn to cross-border payment technology

Technology and the massive digital shift have made it easier for companies of all sizes in all industries to tap into new markets.


But as B2B changes, with suppliers and buyers connecting in new time zones and paying each other in different currencies, the harsh reality of skyrocketing interest rates means technology must meet different needs. means It’s about helping businesses, especially smaller ones, get to work quickly. Changes in foreign exchange rates.

There’s an urgency, especially for businesses experiencing skyrocketing payment volumes. Many still rely on manual processes, data entry and spreadsheets (in short, human touch) to deal with the daily fluctuations in foreign exchange.

Manual processes leave room for error

But, of course, doing so leaves room for error and delay. Central banks around the world are jumping on each other to raise interest rates and stem the impact of rapid inflation. Many banks are following the footsteps of the US Federal Reserve (Fed), which has shown signs of easing the Fed’s approach, where a massive 75-point rate hike has become the norm. Is not … As the US dollar continues to soar, many currencies (the British pound being just one prominent example) have plunged.

Businesses looking for ways to increase profit margins, reduce manual tasks, and automate FX management and cross-border payments should take a second (and possibly third) look.

Kat Moore, head of EMEA payments solutions at JPMorgan Chase Commercial Banking, said in a recent interview with Karen Webster that corporate customers have visibility into the “payment landscape,” where payables and receivables are You mentioned that you want to find ways to optimize it. Without real-time insight into cash positions, accountants and other financial professionals are unable to make sound investment decisions to minimize foreign exchange (FX) rate volatility.

PYMNTS data shows that there are ample opportunities for financial institutions (FIs) to serve their corporate customers, greenfield opportunities are significant, but there is room for improvement in execution. As reported in the latest edition of “B2B Cross-Border Payments,” a collaboration between PYMNTS and American Express, almost two-thirds of FI executives believe their cross-border payment solutions are facing cross-border It is said to be effective in dealing with boarder challenges. By SMBs, 37% say these solutions are not effective.

But FIs and their smaller clients are adopting the high tech needed to improve these operations. Application programming interfaces (APIs) help streamline and automate the communications that must flow across borders between a company’s backends and with his FIs, reducing friction-filled manual work. Interoperability and standardization help businesses more effectively understand and mitigate the impact of rapidly changing rates. PYMNTS found that 56% of all US businesses see enhanced cash management capabilities as a benefit of cross-border payment solutions.

Small businesses are increasingly aware of the benefits technology can bring to improving margins. As the chart below shows, the majority of companies expect better cash management and lower costs to be the main benefits of cross-border innovation.

New PYMNTS Survey: How Consumers Use Digital Banks

A PYMNTS survey of 2,124 US consumers found that while two-thirds of consumers use FinTechs as part of their banking services, only 9.3 call them their main bank. % was.


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