It’s a big world, but ongoing cross-border payments advances are helping make it smaller.
That’s because, with the recent news that HighRadius has launched a B2B payments platform designed to improve payment processes across more than 100 payment methods globally, innovative solutions for cross-border payments are top of mind for ambitious enterprises looking to expand their reach and market share.
But when it comes to providing these solutions, payments players have traditionally been faced with the question of whether it is best to buy, build or partner their way to global market penetration.
And the traditional choice between building an in-house solution, buying a ready-made product, or forming a strategic partnership is undergoing a fundamental shift as end-users increasingly come to expect a seamless, technology-driven experience.
After all, traditional cross-border payments are full of manual processes and embedded bottlenecks as a result of various correspondent banking systems, time zones and disparate local regulations.
For businesses looking to expand internationally, the calculus among payment providers is starting to shift toward leveraging partnerships when providing payment services.
This enables solutions to come to market quicker than it would take for an organization to build a solution, or acquire one, on their own.
Read more: Can Payments Innovations Solve U.S. Merchants’ Top 5 Cross-Border Challenges?
As the global economy becomes more interconnected, cross-border payment innovations become more necessary. The G20 has identified key areas that need to be addressed to improve the speed, cost and transparency of cross-border payments.
Underscoring this need, faulty cross-border payments cost U.S. merchants at least $3.8 billion in sales last year alone, according to data in the PYMNTS Intelligence report, “Cross-Border Sales and the Challenge of Failed Payments,” which also found that 70% of U.S. firms experienced higher rates of failed payments in cross-border sales compared to domestic sales.
But the marketplace is responding by increasingly leaning on partnerships.
“It’s a reevaluation of the question of build versus buy versus partner,” Igor Bazay, head of finance at Enigma told PYMNTS last April. “[W]hat this environment shows is that partnerships should be a part of that conversation to an extent that they were less so in the last couple of years.”
Last month, Mastercard announced a new connection with China’s Alipay, which enables bank, FinTech and corporate clients to offer customers a connection to an eWallet that has more than 1 billion users.
Elsewhere in China, on Friday (April 12) Tencent made it easier for visitors to mainland China to register for a WeChat account and to link international cards to Weixin Pay.
“Wallets are becoming a cross-border mechanism,” Alan Marquard, head of transfer solutions at Mastercard, told PYMNTS in March.
In Europe, embedded finance firm Swan on April 5 integrated Wise Platform to enable its clients to send and receive money from more than 190 countries, while in March, Visa announced an expanded partnership with LemFi, allowing the latter to extend its reach into China, India, Pakistan and other new markets around the globe.
Read more: Capturing the $250 Trillion Cross-Border Payments Opportunity
“The cross-border B2B market is growing massively,” Neil Drennan, chief technology officer at Visa Cross-Border Solutions, told PYMNTS in an interview posted in November. He emphasized that this rapid growth means there are more businesses than ever looking to move money around the world “quickly and transparently, with complete clarity around costs.”
For firms looking to capture a share of this growing and attractive cross-border payments pie, partnerships can provide access to advanced tools and expertise that facilitate efficient and reliable cross-border transactions.
PYMNTS Intelligence data in “The FinTech-Bank Relationship Shifts Toward Collaboration” showed that 65% of banks and credit unions have entered into at least one FinTech partnership in the past three years, with 76% of banks viewing FinTech partnerships as necessary to meeting customer expectations.
Further reading in “The Treasury Management Playbook: Spotlight on Cross-Border Payments,” a PYMNTS Intelligence and Citi collaboration, examines why cross-border payments are more important than ever and how companies can minimize the traditional frictions associated with international transactions.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
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