How the right international payment systems can be the catalyst
It's no surprise that the global economy is labelled – at the most diplomatic level – as ‘volatile’.
What is in fact being described is a deformed structure which is caught in a perpetual trap of boom-bust financial cycles, meaning the global economy is causing concern for businesses as debt ratios rise to vertiginous levels.
As economic and political uncertainty continues to rumble on across the globe post-Article 50 Europe and through Trump’s America, the impact on the cross-border payments landscape is substantial.
But few challenges are presented without opportunities too and there is a pertinent need for businesses to remain vigilant during this period of economic turbulence, minimising the potential risks to operating profit and maximising business resilience in an increasingly competitive climate.
First and foremost, a business that is planning to transfer money overseas for the first time, or even an organisation reviewing its cross-border payments processes, should always be aware of any potential hidden charges.
Many businesses fail to check the rates they are being charged per transaction, and for high volume transactions, additional fees can cause a significant dent in profit potential. As different providers offer variable rates and many lack transparency of the charges incurred, it’s worth having clarity over the process.
Currency fluctuation risk
While there are palpable benefits to having an overseas base of employees, customers and suppliers, it does expose many businesses to the risks of currency fluctuations. It is important for businesses to partner with a specialist payments provider which is capable of effectively managing the risks associated with these currency fluctuations.
For example, providers that specifically offer Forward Contracts enable businesses to lock in current exchange rates, enabling them to make foreign currency payments at a pre-agreed rate in the future.
This has two significant benefits: protecting profit margins on sales against currency fluctuations and fixing the physical cost of paying overseas employees. While of course it is impossible to rule out the inevitability of continued currency volatility, especially given the current economic environment, it is possible to mitigate these risks with carefully managed processes.
Paying overseas employees
In recent years, a significant number of businesses have expanded their global employee base overseas – often a cost-effective solution which also presents the opportunity for a business to acquire more expansive skills across its workforce.
It is imperative therefore that a payments provider possesses not only the technical capability to process high volume payments to different countries and in different countries, but also the in-country knowledge and expertise to process these payments in a timely manner with a near-perfect rate of accuracy – to avoid delays, charges, and the potential reputational damage incurred by a missed or incorrect salary.
The threat of missing payments
For thousands of businesses across the UK, a delay in a payment can sometimes prove lethal. Not only can a late payment hinder an organisation’s ability to grow successfully, it can also damage business relationships.
Partnering with a payments provider which has the relevant technology capable of preventing payment mishaps with processes such as IBAN verification and bulk file uploading (reducing the requirement for manual data input), is a simple solution which can pay dividends in the long term.
With the rise of the sharing economy and online marketplaces such as Airbnb and Uber, consumers and businesses worldwide now have a plethora of buying options available at their fingertips. As such, online retailers are always looking to improve their commercial edge, including the ability to take payments across global marketplaces in any selected currency.
Fundamentally, the key to facilitating business growth during a challenging economic climate is to partner with a global payments provider which can handle the ever-growing complexities of the cross-border payments process and can streamline operational efficiency with an all-encompassing solution.