Kenny Tsang, industry expert and Managing Director at fintech unicorn, PingPong Payments, discusses how technological advancements within the payments space can help businesses to become more efficient and achieve international expansion in 2022.
Traditional business processes have seen a massive upheaval in the past few years, with the pandemic shown to have accelerated the digitization of companies’ international operations by three to four years. This trend has also had a profound impact on the payments landscape, with businesses increasingly turning to technology and automation to streamline their payments processes.
Even though some companies have been cautious to modify or replace legacy payment processes and systems, recent improvements to the security and privacy of payments have helped to reassure businesses that it is safe and worthwhile to do so. According to statistics presented by Insider Intelligence, the total amount invested in banking technology is set to reach over $113 billion in 2025, demonstrating the emphasis financial institutions are placing on prioritizing security and the advancement of the digital payments ecosystem.
In order to achieve success in crowded industries, organizations need to streamline and digitize their payments processes by seeking out all-in-one partners that can support various elements of their financial operations and growth. Here are a couple of benefits that being an early adopter of automated payment solutions can have for businesses in 2022:
Facilitating global expansion
International eCommerce is becoming an increasingly popular option for small and medium-sized businesses (SMBs), with the flow of cross-border payments growing at around 5 percent (CAGR) a year. By entering the lucrative global market, where eCommerce sectors in countries like China and India are predicted to reach $3.3 trillion and $120 billion respectively by 2025, companies can expand their customer base exponentially. Historically, banks have played a central role in the cross-border payments process, setting up local accounts in each new market before enterprises are able to conduct business there. However, the harsh reality is that change within the eCommerce space is taking place faster than traditional banks can adapt and, as a result, emerging fintech solutions are filling the gap by providing agile support for growing organizations. Automated cross-border payment providers can set up virtual accounts and AWS receiving accounts in a matter of minutes, enabling SMBs to capitalize on emerging international markets at breakneck speed.
Faster and more efficient payments
In our fast-paced society, it may be hard to believe that the global average for the time it takes to pay a supplier has reached 66 days. The incredibly long wait times for international supplier payments, not to mention the hidden foreign exchange fees, can often have substantial financial and operational implications for businesses wanting to enter the global marketplace. Fortunately, automating cross-border payments can drive efficiency for SMBs and ensure that international payment transfers are made quickly, in suppliers’ preferred currency.
The operational savings that can be made across entire organizations by partnering with automated payment providers should not be underestimated. It is not only the time saved through the faster processing of payments that should be considered, since all-in-one payment partners can also lower operating costs through the automation of payroll and taxation processes. Automated payroll processes address the common problems associated with traditional payroll methods, including payment delays, expensive wire fees and complicated local legislations, while taxation automation can streamline VAT payments at every stage of the supply chain. Overall, digital technology can be utilized by companies wanting to automate their business processes and achieve mid-market velocity, without the mid-market headcount requirements and costs.
In an increasingly global marketplace, businesses should be harnessing new technology to streamline business processes and facilitate expansion into new and attractive markets. All-in-one payment partners play an essential role in helping companies to reduce operational costs, by providing frictionless and automated solutions for cross-border payments, as well as payroll and taxation processes. The financial savings made from automating these operational processes can then be reinvested into an organization’s international expansion strategy, ensuring they can remain competitive and succeed in crowded markets.