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Industry voices Paytech Thought Leadership

Currencycloud: Why Global SMEs Must Matchmake Payment Tools for International Growth

Global small and medium-sized enterprises (SMEs) seeking to grow their businesses in the increasingly competitive global marketplace must modernise their payment functions to keep pace with consumers’ cross-border payment options.

International payment currencycloud
Rohit Narang, managing director of APAC, Currencycloud

Currencycloud, a foreign exchange and cross-border payment company acquired by Visa, delves into the compatibility of international invoice-to-pay and third-party cross-border payment in enhancing international payment capabilities.

Led by Rohit Narang, the company’s managing director of Asia-Pacific (APAC) and a keen technology enthusiast with almost 20 years of experience in financial services, this op-ed for The Fintech Times explores not only the hurdles that businesses frequently encounter in making international payments, but also delves into why two of the industry’s leading innovations must come together to find a resolution.  

Why global SMEs must matchmake payment tools to grow

Consumers are enjoying a proliferation of cross-border payment choices, each more seamless and integrated than ever before.

Businesses, however, have largely kept to the same few modes, namely cheques, telegraphic transfers and corporate credit cards. With the advent of digital cross-border money movement and management technologies, dedicated B2B payment solutions are emerging for different enterprise uses, leading to an acceleration of B2B cross-border payment.

This, according to a new Juniper Research study, translates to an estimated global spend of $40trillion on B2B cross-border payments by the end of 2024, increasing from $37trillion in 2022.

To this end, there are two important B2B payment technologies that must come into play to help businesses modernise the way they make international payments, namely international invoice-to-pay and third-party cross-border payment.

Smaller enterprises eager to be more competitive in the global arena should seek to matchmake these two sets of capabilities to generate synergies that could change the game of B2B payment for themselves.

Matching B2B technologies to modernise payments

Invoice processing can be a complex and time-consuming endeavour, so its modernisation has significantly helped enterprises streamline the way they process money movement.

In Singapore, this has been accelerated for local e-invoicing by the Infocomm Media Development Authority (IMDA). It is now possible for businesses registered on its InvoiceNow network to directly transmit local e-invoices from one finance system to another without human intervention, making the process simpler, faster and more secure than before.

International invoice-to-pay, on the other hand, has far more complicated processing that factors in variables like tax, languages, currencies, currency regulations, payment preferences and others. Its digital transformation has greatly impacted cross-border payment efficiency today, with the automation of international payment workloads making the management of overseas invoices far less encumbered and error-prone.

On the actual payment part of things, third-party cross-border payment solutions are becoming increasingly available through non-banking financial services offered on fintech platforms.

Many of these services target small and medium businesses (SMBs) with deals like affordable foreign exchange, international payment accounts and currency risk management. Conveniences like local currency collections and payouts in different countries can also enable them.

Coming together for more synergies

Independently, these two technologies have been making life easier for enterprises to manage their increasingly global invoicing, collection and payment processes. When converged, the synergy not only dramatically reduces the friction of money movement but also raises the efficiency of payment processing and invoice reconciliation.

Deployed in tandem, a lot of unnecessary human intervention will be eliminated by their respective automation and interoperation with enterprise software like ERP systems and accounting solutions.

Their best practices also complement to make invoice processing and payment more transparent, traceable and compliant. Together, they enable the digital transformation of B2B cross-border payment that can benefit all stakeholders in the global supply chain.

We highlight a use case for reference to help you understand how enterprises can adopt third-party cross-border payment to supplement their international invoice-to-pay function:

Use case: GetMyBoat

GetMyBoat is a marketplace for boat renting across the globe. Previously, it handled international business transactions manually, from setting up costly bank wire transfers one at a time to creating payment templates for the boat owners. Such processes were not sustainable for its growing business.

To simplify and speed up this cumbersome process, it implemented a payment system from Currencycloud that allowed payments to occur more quickly, securely and efficiently, as compared to banks and fintech competitors, with an automated system that freed up employee time from manual processing.

The solution worked with collections and payments for both parties involved, ensuring seamless payment processing for both the renters and their customers on the platform. And because paying in their local currency is important to boat owners, payouts are available in over 20 different currencies in over 100 countries.

The implementation resulted in quick payouts to boat owners in their local currencies at a far lower cost to the end user, saving GetMyBoat 90 per cent of the time and 95 per cent of the costs associated with standard bank wires.

The B2B payment bliss

Indeed, international invoice-to-pay and third-party cross-border payment make a perfect match. This is no secret, and businesses around the world are fast catching on to the fact that their synergy can be a powerful competitive advantage.

For SMBs still sitting on the fence about whether to modernise their payment function, they must decide soon before the competition closes in and elbows them out of the game.

Author

  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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