43% of US-Based Multinationals Plan to Enable Supplier Payments to Digital Wallets

Multinational companies that actively trade with business partners abroad are increasingly taking the initiative to improve outdated legacy cross-border operations, with nearly half reporting that they were in the process of upgrading their capabilities.

In fact, 43% of U.S.-based international enterprises said they are planning to enable supplier payments to digital wallets, according to the Payment Orchestration For Global Commerce Playbook, a study done by PYMNTS in collaboration with Payoneer.

In addition, 29% said they expected to adopt real-time payments receipt capabilities within the next three years, while other respondents said they were planning to implement dynamic discounting, straight-through processing and virtual card options.

Innovations like these can facilitate faster and more efficient cross-border commerce, but they cannot completely solve the need to build and manage connections with business partners that enable them. These might include risk providers, aggregators, payment gateways or other entities.

“At the end of the day, the merchant’s entire revenue depends on the fact that each customer’s payment goes through,” Karen Levy, chief operating officer at Payoneer, told PYMNTS. “However, given the diversity of the payments market, the differences in local payments preferences and the complicated nature of tech infrastructure in eCommerce, ensuring a smooth and frictionless payment process is challenging.”

Facing Potential Roadblocks 

International enterprises face a barrage of potential roadblocks when they enter a new market. They must add payment methods native to these markets to their payment stacks and ensure that they are operating in accordance with local regulations. This often means finding new payment service providers (PSPs), payment methods, acquirers and risk providers to deliver the geographic-specific services needed to establish a local presence.

Adding new payments capabilities like these is often not enough to optimize cross-border payment flows, however. Legacy cross-border payments practices like correspondent banking and manual processing can add time and frustration to this already complex process.

Because of frictions like these, international U.S. businesses wait 53% longer to receive cross-border payments than they do to receive domestic payments, on average.

Alleviating Growing Pains 

To make the task more manageable, a growing number of global businesses are partnering with a payment orchestration platform (POP) that can help them simplify their cross-border payments operations. In fact, the projected average compound annual growth rate for the global payment orchestration market between 2021 and 2026 is 20%.

“Payment orchestration is a technology that empowers merchants to create their global payment setup from a single access point, giving them the freedom to choose from the best payment partners worldwide while optimizing their payment process,” Levy said.

POPs can help alleviate many of the growing pains that businesses experience when they expand. They do so by providing a payment orchestration layer, which can support growth and facilitate more flexible payment flow management as businesses alter their payments stacks.

Gaining Access to Partners Across the Globe 

With payment orchestration, businesses need to build and later maintain only one connection. This gives them access to their desired payment partners across the world while providing value-added services like routing, reconciliation, payment analytics and more.

The integrated user interface that payment orchestration layers provide typically allows payments decision-makers to alter their stacks with the click of a button, removing the cost and hassle of adjusting their IT infrastructures or searching for and switching out new PSPs as they expand. This provides the operational freedom and breathing room companies require to fuel long-term growth.

“Whether merchants have ambitious expansion plans or want to have a backup payment partner, route payments through a more efficient transaction path, reduce fraud or make payment processes more efficient,” Levy said, “POPs are a go-to partner when it comes to solving payment challenges.”