Companies have been preparing for global competition for some time, with many investing in a range of new acronyms – ERPs, CRMs, TMS, HRIS. However, their hands are often tied by underlying infrastructure issues when it comes to cross-border payments.
Robin Gandhi serves as the chief product officer at Nium and is responsible for the end-to-end product management, overseeing the company’s product roadmap. Nium is the global platform for modern money movement. It provides banks, payment providers, and businesses of any size with access to global payment and card issuance solutions. Its modular platform powers frictionless commerce, helping businesses pay and get paid across the globe
Prior to joining Nium, Gandhi led the product, engineering, design, and operations efforts at TripActions, for its Liquid offering – a next generation payment and issuing platform. He also has previous experience running acquiring, product, data, and partnerships at Adyen and leading the launch of their global issuing offering. Gandhi also has spent time in management consulting and founded his own firm, Broadroots Consulting, which was acquired by the New York based agency, Converseon.
Here Gandhi discusses the problem of legacy payments and steps to solve this.
Since different countries have distinct risk and compliance rules, businesses must demonstrate compliance and accountability within each territory. Until now, payment providers, such as banks and aggregators, tended to facilitate payments directly – within a few geographies – partnering only with other banks to move money beyond their domains.
This means that a payment from the US to an emerging country, such as Malaysia, may have to go through multiple institutions before reaching its final destination.
This is expensive, slow, and unreliable; to keep up in a fiercely competitive global market, businesses deserve better.
The need for payments transformation
In Nium’s international expansion plan and payment strategy survey, it was found that 83 per cent of businesses are planning on expanding their business operations, or reach, into a new international market in 2022.
A crucial factor to consider here is that for businesses looking to expand across new geographies, adding new global payment pathways can require integrating new platforms, embedding them into existing workflows, and updating back-office systems, resulting in weeks or months of engineering time. Moreover, the service that they eventually get can often fall short.
Three key factors are putting additional pressure on payments:
- Retail has reshaped business payments: E-commerce, alternative payments methods, and mobile payments have changed expectations. Businesses and consumers want faster, cheaper, and more transparent cross-border and business payment solutions.
- Emerging markets are a key growth area: Regions such as Africa, Latin America, and Asia make up an ever-increasing share of international transactions, growing by around 11 per cent (CAGR). However, sending and receiving money in these markets can still be slow and inefficient, thus hindering efficient expansion.
- Payments need to keep up with disruption: In a changing market, hiring strategies, supply chain management, and expansion require the ability to create, maintain and adapt payment networks that cater to the needs of the business.
According to research by Nium, leaders view security as a key payment concern for businesses followed by operational inefficiency and difficulty in managing multiple payment vendors and systems. As a result, 61 per cent of decision-makers say that managing payments takes too long, meanwhile 48 per cent stated their company experiences reconciliation issues at least half the time when making or receiving payments.
Companies are also aware of the opportunities of payments; Nium’s research revealed that 40 per cent of business leaders saw accelerating digital business as a critical driver for business payment transformation, followed in importance by revenue growth, cost reduction, and better compliance.
So what does a better system look like?
Defining the modern money movement infrastructure
Global businesses need modern money movement – the ability to move capital quickly, easily, and safely in any currency, format, or geography – while meeting all risk and compliance obligations.
While the technology to make this a reality has existed for some time, the commercial incentive has become more urgent in recent years.
To solve the payment problem, businesses need an architecture that can connect the necessary business applications and systems, track the real-time information flow across them, and scale and evolve with their needs.
In terms of infrastructure this requires:
- Payment licenses for every region a business might want to expand into, rather than being tied to existing pathways, to enable local and global reach
- API integration between internal and external systems to share information instantly, compliantly, and securely
- The ability to move money via and between different payment modes and methods, such as virtual cards or even crypto currencies.
This system offers wide-ranging benefits including faster payments to employees, suppliers, and customers, shorter reconciliation processes, and clearing windows to better manage cash flow and working capital. There’s also improved strategic business management due to precise insights from real-time cash flow and liquidity positioning.
How to modernise your payments
Research from Nium concluded that 79 per cent of businesses find building and maintaining their own payments systems burdensome.
The more reliable alternative is to partner with an established payments platform that can provide targeted expertise, support, and flexibility. This gives teams more space to focus on using these systems, and extracting value from them, rather than custom building and maintenance hassles.
Nium has created a global infrastructure to power modern money movement for financial institutions and fintechs, platforms, and enterprises as they serve businesses and individuals worldwide.
With a comprehensive license infrastructure built over time in some of the fastest-growing economies, Nium’s portfolio covers 11 of the world’s jurisdictions, enabling seamless global payments and rapid integration, regardless of geography.
To find out more about how Nium is changing the face of payments, download the new report Essential Payments Transformation for the Modern Money Movement or contact a Nium payment expert.