In today’s financial services landscape, digital-first is becoming the norm.
Whether it’s peer-to-peer (P2P) transfers via apps or contact-free daily purchases, innovations like instant payments and digital wallets have shaped the way global commerce is carried out. A recent McKinsey survey of American consumers showed that 89% used digital payments, while 62% reported possessing two or more methods.
Yet when it comes to B2B cross-border transactions, there are still significant hurdles — and digital capabilities don’t automatically alleviate the pain points of navigating new markets. Instead, it takes a unique combination of financial technology, global partnerships, and compliance expertise to accelerate the transition.
Let’s dive deeper into the challenges facing B2B payments today and what you can do to position yourself for a frictionless future.
Put compliance first
For growing businesses, fast FX payments may seem like the be-all and end-all. And when legacy systems often take multiple days to clear transactions, it’s no surprise that there’s an urgent demand for alternatives allowing for better real-time cash flow management.
But expedited transfers alone aren’t the only key to efficiency. Just as important as speed is the compliance infrastructure that undergirds a payments platform.
According to Tony Wicks, former Head of Financial Crime Compliance at SWIFT, the benefits of near-instant payments for customers introduce a new set of compliance risks. Among the most pressing challenges is “how current controls will need to adapt to avoid compliance becoming a business-inhibiting bottleneck” in the digital payments chain.
With more and more FX fintech players entering the space, robust compliance becomes a differentiator. Get a competitive advantage — and avoid having funds held for lengthy review periods — by seeking a cross-border payments provider with reliable banking partnerships and specialists who understand the regulatory nuances of their markets.
Save time and cut costs with localized payments services
Despite the development of central bank digital currencies (CBDCs) and potential applications of decentralized finance, the B2B FX ecosystem is playing catch-up to create systems that can communicate with one another between nations. That means there’s still significant value in utilizing local currencies.
By incorporating local currencies into digital payments, you can both cut costs and reduce settlement time.
For example, if you’re operating exclusively in US dollars, it’s common for vendors to add a buffer into bills to protect themselves against fluctuation. In this case, vendors also need to make subsequent conversions from USD to their currency — a series of small charges that add up for your business.
Leveraging local currencies also simplifies reconciliation and reduces the wait times for payments to get posted to accounts. Rather than waiting for corresponding foreign banks to ensure the currency conversion is accurate, invoices can be verified quickly.
Harness the power of a global network
The digital FX payments age is here, but the transition to instant, seamless FX payments relies on the capabilities that financial institutions and payments innovators have built up for decades.
With Convera, you can tap into a network spanning 140 currencies across 200-plus countries. Our secure, custom-branded tech stack turns cross-border payments into simple local transactions — all backed up by teams of experts with decades of experience in compliance and regulatory environments around the world.
Ready to expand and compete globally? Contact us today and start unlocking more value in every transaction.
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Plus, dive deeper into the trends shaping cross-border payments with our podcast, Converge.
