The fintech sector is constantly adjusting and adapting to meet investor, customer and regulator needs. The growth of fintech-driven payments, such as mobile and cashless transactions, has indicated a shift in how consumers prefer to transact and how financial institutions deliver services. According to a World Bank report, two-thirds of adults make or receive digital payments.
Fintechs also recognise the impact of blockchain technology on revenue generation, process efficiency, end-user experience and risk reduction. Many have enjoyed significant growth, and businesses and consumers are reaping the benefits of improved global money transfers through fintech innovations.
Let's look at some benefits of fintech-driven payments for global businesses.
1. More alternatives
Fintechs operate multilingual websites designed for different regions, allowing consumers to make choices depending on where they live. For example, some companies provide access to their websites in different languages, while others enable clients from most countries to register on their platforms. This flexibility leads to a broader array of alternatives for people looking for ways to make global payments.
Instead of falling back, businesses relying on agent networks are turning to technology to make the process more cost-effective and secure for their clients. As a result, many fintech platforms have numerous use cases for blockchain-based payments, crypto settlement and Web 3.0. While regulatory debates on the long-term viability of these next-gen payment innovations remain, they represent previously unavailable options, which is a positive.
2. Reduced costs
There is no doubt that for many communities, global remittance has proven a lifeline. However, it is also true that international remittance services are costly as they come with a handful of hidden charges.
Factors affecting remittance costs include FX spreads, the distinction between the inter-bank currency conversion rate and the bank’s quoted rate, the processing fee for each money transfer, and multi-intermediary commissions associated with the process.
Fintech has enabled the integration of physical and digital payment methods that consolidate multiple bank accounts or cards using a single interface. This capability empowers businesses with more accessible transaction methods and reduced overall costs.
3. World-class compliance and security
Due to their unique position as disruptors and specialists, fintechs can easily navigate regional regulatory and legal differences.
Take Tranglo, for example. With cybersecurity in the spotlight, we have spent more resources than ever on maintaining a world-class compliance department to place adequate controls and vet every transaction.
Our IT system also allows us to detect anomalies and attend to them more quickly and effectively than traditional banking systems that often have much more on their plates because of diversification.
4. Greater speed and convenience
Technological advancement has caused transactions, processes and systems in various industries and sectors to become much faster. For example, many payment systems are quicker, even those running without blockchain tech or other innovations. In addition, some fintech solutions also let users select from various delivery options, including an express delivery method aimed at further enhancing the speed of the transfer process.
Traditionally, customers would have to head to their respective bank branches or use online banking applications to transfer money outside the country. Fintech-driven payments have no such restrictions and can process transactions anytime and anywhere.
5. Increased transparency
Efficiency and cost advantages aside, fintech has also begun to pave the way for better transparency in the finance industry. International payment solutions are setting new benchmarks related to the perception of the global remittance process. Fintech platforms keep their users informed of their transactions. In addition, they deliver information in a modern and intuitive manner that enhances usability.
Services, such as 24/7 support, real-time updates and security measures, have impacted aspects like trust and reliability and empowered users.
Cross-border payments have come a long way. Fintech-driven payments have made it easier for ambitious businesses and traders looking to grow outward. If you want to know more about what fintech can do for your business, contact us, and we will get back to you.