At a time when an increasingly large number of businesses are getting involved in international trade, including smaller ones, it is unsurprising that the need for help remitting payments to suppliers all over the world is rising commensurately.
Add in recent supply chain shocks and the transition to an increasingly dispersed workforce, and the need for faster and more transparent cross-border payments has been laid bare.
According to the “B2B Cross-Border Payments Tracker,” a PYMNTS and American Express collaboration, the needs and concerns surrounding the sending and receipt of money vary as much as the companies and geographies of the businesses surveyed. We have pulled together a few of the most consequential insights about how businesses are faring in terms of their B2B cross-border payment operations.
Room for Improvement
Per the report, 48% of businesses said they were looking for an enhanced cross-border payment solution “that has transparent fees and rates, and a simpler user experience.”
The report also found that less than a third of the businesses said that their current B2B payment solutions are satisfactory when it comes to meeting companies’ cross-border needs.
At the same time, less than a third of companies surveyed believed their current solutions were very effective, with the balance viewing them as “somewhat effective” (37%) or just “slightly effective/not effective” whatsoever (33%).
Related: FinTechs Say Traditional Payment Rails Don’t Meet SMB Owners’ Needs
Pounding on Pain Points
The desires of companies regarding cross-border payments are fairly uniform, with most wanting transactions to be fast, cheap. and secure. However, it’s also clear that many businesses are not averse to being proactive and implementing new solutions in order to make cross-border payments easier.
A recent PYMNTS survey of 300 executives found that 64% of companies are very or extremely willing to adopt new technology to solve pain points. Of the businesses that are implementing new cross-border solutions, more than half said they expect improvements in cash management.
The second most prevalent expectation was that the planned changes would lead to reduced costs (54%). It is not surprising that companies are investing in solutions that would reduce costs, as rampant inflation is putting pressures on businesses to cut costs where they can.
Reduced fraud and improved data visibility are expected to be improvements by 51% and 41% of businesses making moves regarding cross-border payments, respectively.
Who’s Offering Solutions
To be sure, there is no shortage of companies attempting to address the need for faster and more transparent cross-border payments. Numerous prominent players and FinTechs are specializing in ways to eradicate customary frictions in niche market segments.
Ripple, for example, is looking to disrupt the cross-border payments industry by offering blockchain-powered solutions that allow companies to deliver real-time global payments in seconds, rather than days, without tying up capital in far-away lands.
Other large payment service providers are also doing their part. The Belgium-based interbank messaging cooperative SWIFT, for example, is tapping into the power of its massive network of global financial institutions to lubricate the payment rails that connect banks around the world.
See also: SWIFT Testing Use of Blockchain for its Corporate Communications
What the Future Holds
As commerce continues to become more globalized and businesses seek to diversify supply chains, demand for cross-border payment solutions will grow. This will require legacy industry players to become nimbler and more creative at satisfying the demands for real-time, transparent international payments.
Those that are slow to adapt will be challenged by the multitude of FinTech startups that have been entering the scene, with the promise of removing frictions from cross-border commerce.
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