Free Up Operational Time With Simpler Payment Processes

Time is money in business. Waste one, you waste the other. The adage holds true in payments, especially, and manual processes are to blame.

Jon Burrell, vice president of operations at international payments platform  Currencycloud,  takes PYMNTS through the ways firms in B2B and beyond can keep customers happy and the coffers full — even when operating across borders, and all while the clock is ticking.

But what if it was money itself, or its transfer, that was wasting a business’ time? That’s when operational streamlining through financial technology becomes key.

Consider this example: A business spends 70 percent of its  time making B2B payments, manually processing and reconciling them, transferring money between bank accounts and then following up to make sure everything is where it should be. That leaves a scant 30 percent of the firm’s (and, more specifically, management’s) time for building the business. Do this day in and day out, and you create operational inefficiencies that may eventually cripple a company.

Unfortunately, it can be challenging for companies to find solutions that streamline efforts when working with multiple banks.  In fact, says  Burrell, the problems inherent to the banking industry can actually cause businesses to lose customers, because they don’t understand how slowly things move in the industrial banking arena.

“One thing we’ve seen is that customers will have an expectation for things to happen fast,” Burrell said. “A lot of customers are asking for things to go faster, and businesses are having to respond to that, because, although it’s the digital age, the global banking network is old and slow.”

So, how can businesses focus on growing their operations and maintaining their client bases while still keeping customers happy? Burrell said companies seeking a do-it-yourself approach to working with multiple industrial banks across the global landscape often must identify  what they really need instead of what’s nice to have. After all, not every bank will offer the same processes and features.

“Many businesses will split services between banks based on their specialties,” said Burrell.

Currencycloud recently debuted a white paper outlining how businesses can keep customers happy without spending a fortune on banking solutions — and, in the process, free up time to actually run their businesses.

What follows are just a few of the important things every company should know about international payments solutions in today’s B2B payments landscape:

1. B2B Payments Via Banking Providers Are Slow And Expensive.

Some 95 percent of international B2B payments go through a business’ multinational banking provider, but that bank may have a different infrastructure in place than at the recipient’s bank. This can lead to slow payments processes, and while the business is tracking those payments, time is a-wasted. In addition, fees can pile up for these payments, because banks typically charge high rates for such services to all but the largest customers.

2. International Payments Through SWIFT Are Costly. 

While most businesses are aware they can more quickly make international payments through their banks by using the SWIFT network, the reality is this payments solution can be expensive, often costing between $30 and $60 per transaction. Interestingly, if a payment ends up going through a bank where the business already has a relationship, the business will never know about these transaction costs — these payments are made blindly, so a customer can’t ask the system to waive fees at banks where they have accounts. Instead, the SWIFT network collects the money, and the customer never learns what route that cash took.

3. Networks Like ACH Limit Currency Exchanges. 

Efforts to simplify payments between banks have resulted in platforms like the U.S.  ACH network and the U.K. Faster Payments program, both of which allow money to travel quickly at a lower cost. Unfortunately, these networks typically require payments to be completed in the local currency, which means international payments are an issue with these systems.

4. Manual Systems Are Prone to Errors. 

Businesses that are manually processing payments are subject to  inaccuracies, which can slow or even halt payments in their tracks. Just moving a digit, comma, decimal point or letter can mean the difference between accuracy and inaccuracy, and correcting those issues once the payment has already been processed is no small task, particularly when dealing with overseas banks.

5. Payment Integration Can Solve These Issues. 

Businesses can drive efficiency, improve accuracy, save money and free up more time for operational tasks by implementing an integration program. Because integration programs are built from the ground up, the programs can scale along with the business, and each will fuel the growth of the other.

Businesses seeking to mitigate the issues inherent to global payments can succeed — and achieve more time to work on building their companies — by simply shifting to an integration platform.

“Our success is our customers’ success, so we want to find what we can do to help them grow,” Burrell told PYMNTS. “Understanding the drawbacks of banks’ technologies and costs, and the benefit of having the technology to do that, gives businesses something that doesn’t exist anywhere else. It really solves the problem that banks should be solving themselves.”

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