According to a Reuters report on Jan 29, funding for financial technology firms reached a record US$39.6 billion in 2018, according to research by data provider CB Insights. That represents a 120 per cent hike from 2017, and there's no reason to think that it will not continue on an upward trend. Cross-border payments are heading that way too.
Businesses are changing the way they run and are investing in disruptive technologies because a new generation of tech-savvy consumers is taking over. These millennials are shaping the world in ways our forefathers could never have imagined, and if you are in the market to cater to them, you will do well to think of ways to engage this group effectively. Here are some observations in regard to cross-border payments:
Click & Mortar shopping drives cross-border payment
Convergence of digital and in-store experiences will scale tremendously. Think about it: One can order food from a store for a friend in another country, and that friend then pays when it's delivered. One could even receive a text message with a link to a payment gateway to make a donation to a charity in another country. We already know how much time we spend shopping online (1.92 billion people will buy something online this year), and while traditional retails will continue to exist, they will continue to evolve to take advantage of shoppers who take to e-commerce more than going to a physical store. What this means is more businesses are going to need an integrated solution to cross-border payments (read more below).
Businesses will turn to integrated payments more than ever
Integration is a sought-after payment process that ultimately leads to simplification. Omnichannel payment solutions, such as that provided by digital payments hub like Tranglo, give extensive and viable coverage to a merchant in managing its payment lifecycle. There are already a huge number of businesses taking advantage of these options to simplify their payments. While it's possible the number may stabilise this year as managers look to consolidate their operational expenditure, the pay-off is too high to overlook.
SMEs, especially in Asia, will drive further expansion in payments
Growth in cross-border payments will drift away from previously established sources, as global commerce moves more towards Asia. Small-and-medium enterprises in the Asian region will be drivers and benchmarks of progress, so international businesses need to keep in mind and find a payments partner with in-depth experience in the region to have a share of the e-commerce pie.
Balancing customer experience and fraud prevention will get harder
In cross-border transactions, the stress on quick and hassle-free payments to meet customer expectations also increases pressure on businesses to make sure that frauds don't sabotage a purchase. This means that back-end cybersecurity processes are more important than ever and, as a result, costs will increase. Finding the balance will be key â€“ managing the implications of adding another layer of security in cross-border transactions while maintaining fluid customer experience will determine the success of a venture.
Maintaining an impressive balance sheet will be more relevant than ever
SWIFT head of banking Harry Newman has noted before that new players in cross-border-payments often assure their clients of a better transaction experience. But, he said, with few exceptions, these firms cannot afford the liquidity requirements essential to manage big payments flows. Moving huge sums of funds across multiple currencies will be hard unless one has the balance sheets to match. This means that cross-border firms that can process high transaction volumes and, at the same time, better mitigate external risks will have an advantage.
In this regard, Tranglo, with more than 10 years of experience in cross-border payout, as well as a global network of more than 600 banks in over 100 countries, especially in Asia, can be the payments partner of your choice. Find out more today.