Nick Pedersen, managing director of Equiniti International Payments
While complications with international payments are aplenty, it’s not a bleak landscape for businesses. More options are now available than ever before, with complete solutions which take into account the end-to-end payment process rather than just the physical transaction – this means higher accuracy, greater efficiency, and a better experience for both the remitter and the recipient.
Much of this is being driven by technology – and rather than FinTechs posing a threat to legacy banks, banks and FinTechs are joining forces to offer complete, reliable and highly efficient new banking infrastructures – and businesses and consumers alike are adapting to this new culture change.
An industry report* revealed that, in 2015, 68% of people had never used a technology provider for financial services such as in-store payments, international money transfers, lending, wealth management and property investment. In five years’ time, half (48%) expect to use a technology provider for at least one financial service – and a third (32%) expect to use a technology provider for 50% or more of their financial needs. In ten years’ time, 20% of consumers anticipate they will trust technology providers for all financial services from credit cards to mortgages.
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There is a cultural transition taking place, as both individuals and businesses recognise the value that technology can bring to the payments industry.
For global payroll payments, FinTech is assisting with volume and delivery. Technology is enabling more efficient methods of data uploading by providing bulk upload capabilities and automation. Ultimately, in order to pay employees in different currencies and countries across the globe, the speed and accuracy at which FinTech can identify and validate payment details, convert currency and process the transaction with a completely transparent audit trail is leagues ahead of traditional global payroll processes.
This is enabling organisations to cut down on resource costs and reduce the risk of error. Errors are costly for organisations and, as technology opens up new opportunities around automation and verification processes, can virtually eliminate the risk of payment mishaps. By identifying errors or anomalies much earlier during the payment process, before the bank rejects the payment and incurs costly charges, new technology-based solutions can identify and rectify problems prior to the payment actually leaving the remitter’s bank.
Overall accuracy on payment delivery, therefore, has improved. As global payments become more and more prevalent, specialist payments knowledge deepens, which is further helping to improve accuracy on payment delivery. A richer understanding of the requirements around different country’s banking jurisdictions means that specialist international payments providers can prevent potential mishaps relating to complicated foreign banking procedures and compliance issues.
For organisations marketing their goods around the globe, the evolution of FinTech is also enabling eCommerce retailers to benefit. By offering multi-currency pricing tools, online retailers can offer pricing to consumers in local currencies in real-time, thereby reducing the risk of incomplete transactions and improving the profit margin of the organisation. What’s more, pricing transparency is a huge factor in enabling global trade and, while it is gradually materialising in the payments landscape, there is still room for improvement, especially when it comes to foreign exchange.