Cross-border payments are one of the fastest-growing markets in the digital payment and financial landscape. The global remittance for the year 2023 reached around $840 billion, speaking loud and clear about the growth pace.
As the market trends in cross border remittance grow, the need for businesses to implement a cross border payment solution also increases. If they get an effective and cost-efficient solution to serve their customers, they can gradually enhance their customer base and profits leading to an elevated business. Why not?
It will not only solve the major cross-border issues but will also make their business shine in the cross-border space. So, in this blog post, we will discuss the major challenges of cross-border payments, how a cross border payment solution can elevate your business, and the major features every cross border payments solution for businesses must have.
So, let’s spill the beans
Major Challenges of Cross-Border Payments For Businesses`
The businesses face some major challenges when it comes to cross-border payments, these challenges can hamper their growth and can even reduce their customer base. Let’s quickly go through these challenges:
Challenge 1: High Transaction Fees
Sending money abroad can become quite a big challenge as it incurs hefty fees from the banks and other intermediaries involved (PSPs, Compliance, SWIFT). These high fees can bring a significant dip in profit margins, especially for small amount payments. The high fees for forex, wire transfer, and commission make it even worse for the businesses.
Challenge 2: Unclear FX Rates and Markups
Large foreign exchange markups and spreads are common with cross-border transactions. However, the actual exchange rates and fees charged are often shadowed by complex fee structures. This lack of transparency makes it difficult to calculate exact transaction costs.
Challenge 3: Slow Processing Times & Manual Processes
Cross-border payments typically take 3-5 days to settle due to legacy systems, batch processing, and manual reviews. These delays in the process hamper cash flow and operations. The lack of real-time payments also prevents error checking.
Challenge 4: Limited Visibility and Control
With traditional cross-border payments, businesses lack visibility and control over the entire transaction lifecycle. They cannot see the status of their payment as it moves through multiple intermediary banks, nor can they track the exact fees charged at each step.
This makes it difficult to pinpoint where delays or errors occur, resolve issues quickly, or validate that funds reach recipients as intended.
Challenge 5: Compliance Risks
Navigating the regulatory requirements for cross border money transfer is complex. There are risks of noncompliance with Know Your Customer (KYC), Anti-Money Laundering (AML), and sanctions screening regulations across jurisdictions. Violations can lead to major fines or frozen payments.
How an Effective & Cost-Efficient Cross Border Payment Solution Can Elevate Your Business?
Now that you are familiar with the challenges your business can face in cross border money transfer. Let’s understand how effective cross border payment solutions can help elevate your business while keeping your customers delighted.
Reduce Transaction Costs and FX Fees
Emerging technologies like blockchain for p2p transactions, APIs, and automation allow businesses to bypass traditional intermediary banks and payment rails. Due to this the hefty amounts of wire transfer fees and foreign exchange rates that can highly affect the business profits stay within a limit. The easy and direct connection between the recipient and sender reduces overall costs including the intermediary one.
Enhance Cash Flow and Liquidity Management
Optimized systems with faster payment processing and real-time settlement capabilities accelerate cross-border payment flow. Businesses gain better control over the availability of funds across borders. This enhances their ability to forecast cash flow needs and improve liquidity management.
Operational Efficiencies and Productivity Gains
Automating processes within an optimized payment solution minimizes time-consuming manual interventions and error correction. This minimizes errors, speeds up cross-border transactions, reduces operational costs, and drives overall productivity gains.
This way, the staff can focus on more value-adding tasks rather than being bogged down with expensive and slow manual payment processes.
Security, Compliance, and Risk Management
Cross border payment solutions are designed to handle much of the compliance heavy lifting associated with cross-border payments. They help in automating regulatory checks, and ensuring AML & KYC standards are adhered to.
The solutions boost security by leveraging security features like encryptions, biometric authentication, tokenization, and other such security protocols. In addition to that, the cross border payment solution helps manage risks with real-time risk monitoring, fraud detection, and strong identity verification.
Expand Globally
By modernizing cross-border money movement, companies can remove friction from global transactions and payments. This enables smoother expansion into new overseas markets and facilitates new revenue streams.
Improved global transfer capabilities with various types of international remittances also help attract new global customers and forge stronger partnerships. This solution also become a big driving force for financial inclusion boost globally allowing migrant workers to send and receive money from every corner of the world.
Read More: Boost Financial Inclusion with Cross-border Payment System
Gain Real-Time Visibility
Advanced cross border payment solutions provide real-time tracking and transparency into the transaction lifecycle. Businesses can monitor payment status, fees, foreign exchange rates, and estimated delivery time. This level of visibility enables better cash flow management, forex cost optimization, and accounting reconciliation.
Key Features to Look For in an Effective Cross-Border Payment Solution
Now, we know how beneficial the cross-border payment solution can be for your business. But, how do you know that you are implementing a reliable cross border payment solution? Look for the best features of it.
So, let’s understand what would be the major features to look for in an effective cross border payment solution:
Competitive Exchange Rates and Low Fees
An advanced cross border payment solution must offer customers highly competitive exchange rates to maximize the value of their currency conversions. Also, the fees involved in the entire transaction should not be so high that the amount receivable gets significantly reduced. Hence a solution utilizing payment systems and processes that keep the fees involved to a minimum is a must.
Top Compliance and Data Security
Cross-border payments go through a complete money flow from one country to another. So compliance and security become a top priority. The cross border payment solutions that can ensure offering complete compliance and security at all costs, should become your ideal choice.
These solutions offer compliance by following the required standards and doing ongoing monitoring and offer security by implementing technologies like encryption, tokenization, biometric authentication, MFA, 3D Secure, and much more.
Easy Onboarding and Integration
An effective and cost-efficient cross-border solution offers an API-driven onboarding process that minimizes the time and effort required to integrate into the existing digital payment solutions. This streamlines operations and accelerates the pace at which your business can offer cross-border payment services.
Advanced Reporting and Tracking
A cross border payment solution for businesses must have the ability to offer advanced reporting and analytics tools to give in-detail insights into every transaction and the customer trends and patterns. This empowers your business to make informed decisions and updates as and when needed.
Highly Rated Customer Service
The best-in-class customer service is a must for any solution in the financial space. It not only builds goodwill in the market but also ensures long-term customer loyalty. Hence, an ideal cross border payment solution must have top-notch customer service in place.
Fast Processing Times
Optimized payment rails and real-time settlement capabilities accelerate funding availability across borders. Top cross border payment solutions must enable transactions to be completed within hours or days rather than the weeks involved with traditional wire transfers. This dramatic increase in speed gives businesses better control over cash flow timing.
Payment Tracking
This is one of the most important features of an effective cross border payment solution. The solution must offer robust tracking tools that can provide up-to-date status of cross-border payments, fee deductions, and estimated fund arrival time. This offers businesses with utmost transparency for easy settlement.
Multi-Currency Accounts
Cross border payment solutions must support a wide range of currencies to enable seamless cross border money transfer for customers. This will help minimize foreign exchange conversions. This streamlines operations and reduces costs for your business.
How DigiPay.Guru Can Help?
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We at DigiPay.Guru provide a reliable and secure cross-border remittance solution for businesses to allow their customers to seamlessly send and receive money across borders.
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Our cross-border remittance solution is designed to ensure all transactions are compliant with local regulations and international standards like KnowYour-Customer (KYC) and Anti-Money Laundering (AML) checks, as well as other compliance measures.
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We offer multiple payment options including bank transfers, credit/debit card payments, and mobile wallet transfers.
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Also, our cross border money remittance solution allows you to customize pricing and fees based on the business model to offer competitive pricing that meets the needs of their customers
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We offer robust security in global money transfer with technologies like encryption, fraud detection, and biometric authentication to always keep your customers’ funds and information secure.
Conclusion
An effective and cost-efficient cross border payment solution has the complete potential to elevate your business and solve all the cross border payment challenges to ensure a secure, convenient, and seamless money transfer experience for your customers. Its advanced features can take your business profits and success to the next level.
If you are a business looking to offer a robust cross border payment solution to your customers, DigiPay.Guru is your destination. It not only offers robust cross border payment features but also focuses on making your customer experience very satisfying and reliable.
