Corporates, SMEs, smaller retails and individuals are increasingly consolidating their cross-border payments to boost operational efficiency, minimise cost and increase profitability.
We have talked about how technology is challenging the way businesses perform cross-border payments, and the things to consider when deciding to engage such payment solutions. The latter, in particular, quoted a DHL report that said "global cross-border sales volume has been projected to increase by 25% annually, reaching a staggering "US$900 billion by 2020.
With such a huge amount for the taking, getting onboard immediately and making full use of efficient cross-border payment solutions mean businesses can focus on front-end systems and improve liquidity. But before they can get to that, it is important to identify barriers to cross-border payments and how seamless solutions, such as that provided by Tranglo, can help tackle them.
Businesses engaging in cross-border payments are inevitably at risk of economic fraud, possibly denting investor confidence and causing massive loss. A 2018 PwC report notes that 46% of about 1,000 respondents in Southeast Asia experienced economic crime or fraud in 2016 and 2017².
To counter rampant commercial fraud, Tranglo invest heavily in sophisticated authentication strategies, as well as state-of-the-art compliance and due diligence technologies to ensure that each cross-border transaction adheres to different countries' Know Your Customer (KYC), Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations. The layered security minimises the risk of fraud. Subsequently, businesses can build trust and boost customers' confidence.
As businesses seek expansion, consumers' demands increase. So do costs. Given the multi-channel nature of international payments, it makes sense to consolidate back-end operations so that costs can be better managed by minimising operating expenditure.
The Tranglo platform offers a single interface for every cross-border payment need. Whether a business has suppliers in one other country or 10, it needs only to entrust its back-end operations to Tranglo and its vast network of payment service providers. Tranglo's scalable model also allows businesses to tailor their operational arrangements based on customer requirements.
Cross-border payments often mean engaging in double forex conversion. This may lead to prolonged and unnecessary foreign exchange exposure.
Depending on the size of the corridor, Tranglo's risk aversion strategy typically comprises an in-house FX trading team focusing on daily currency trading. This lowers exposure.
Digitalisation and a changing market infrastructure are forcing businesses to develop new models or ecosystems to stay in the game. This often comes at the expense of efficiency as you may have to invest in app, back-end system and tool development. These processes can be clunky and costly.
A global digital payment hub, like Tranglo, enables companies to move such processes to it, making day-to-day operations leaner and lowering costs. Besides, companies can use the savings to improve front-facing infrastructure like customer support to drive action and boost sales.
One example of sociocultural difference is the perceived value of cash versus electronic transfer. This means that the people of a developed country are more receptive to technology while those in developing countries tend to put their trust in cash. Finding a middle ground is often a daunting and time-consuming task.
Tranglo, with over 10 years of experience in cross-border payments, understands that different people in different countries have different needs and requirements. Whichever payment method your customers prefer, Tranglo has it covered with its network of 300 telecom and 700 financial partners, as well as 100,000 cash pickup points in over 100 countries.
Reach out to Tranglo for strategic cross-border payment solutions and how we can help you break down the barriers to going global.
1 Experian's 2019 Global Identity and Fraud Report
2 PwC's Global Economic Crime and Fraud Survey 2018: Southeast Asia Report