In 2022, cross-border B2B payments amounted to USD37 billion. Traditionally, businesses have relied on banks for their cross-border payment needs and continue to do so; however, the share of non-bank providers is rising steadily.
In this article, we explore the 3 key reasons why businesses are turning to non-bank cross-border payment providers.
More flexible foreign exchange rates
The exchange rate makes up a significant part of the cross-border payment process. It impacts the operational cost, business revenue and liquidity. Non-bank providers like Tranglo usually have solutions that provide flexibility in flexible FX rates, which is a game changer for businesses, especially those with smaller capitals.
Tranglo, for instance, has an FX management dashboard with transparent live quotes, a mid-rate spread, an integrated pricing and conversion platform, and trade and wallet tracking.
The ability to access competitive exchange rates without the higher markups often associated with banks and their larger portfolios is a compelling reason for businesses to switch to non-bank providers.
Highly adaptable to technology
Fintech companies are early adopters of blockchain to address the challenges of cost, speed and transparency - frictions traditionally associated with cross-border payments.
For example, Tranglo has leveraged Ripple’s technology and On-Demand Liquidity to make 80% of its transactions in 2022 in real-time. Meanwhile, Mastercard’s private blockchain solution enables real-time transfers between billions of global cards, banks and digital accounts.
Non-bank providers also use various improvement tools like Kafka to boost data streaming and drive business intelligence. These technologies allow businesses to get real-time insights into market conditions and make better decisions.
Single API integration
APIs are software bridges that communicate seamlessly with each other. According to the Bank for International Settlements, APIs can make cross-border payments faster and more efficient by reducing manual interventions and facilitating timely data exchange across the payment chain.
Non-bank providers have long used APIs to their advantage. For instance, Tranglo has a single API access that integrates any business with its entire payment network of 5,000+ payout partners in 70+ countries. This single-point connection allows the whole payment process - from payout instructions to switching and settlement - to be handled automatically in the background.
This has 2 benefits - reducing frontend loads and significantly lowering overheads - allowing businesses to thrive in a more competitive environment.
Non-bank payment providers have found a niche
When it comes to cross-border payments, non-bank providers can bridge the gap for businesses of any size, even if the formal financial services elude them. This, and the above reasons, is why more businesses are turning to non-bank providers like Tranglo to meet their needs - they found a niche.
Have you found yours? Do you need a non-bank payment partner that many prefer? Talk to us.