Cross border B2C payments provide consumers with the opportunity to quickly and conveniently purchase goods from around the world. With increasing international accessibility and digitized financial systems, B2C payments are becoming more commonplace, allowing individuals to complete transactions in a matter of minutes. The prevalence of B2C payments across national boundaries has improved accessibility to novel products and created an environment free from currency and geographical barriers. Not only do B2C cross border payments provide greater access to products, but they also allow businesses to expand their reach and capitalize on global markets.
Citigroup and PayPal announced that they are partnering to facilitate business-to-consumer (B2C) payments, including cross border transactions. Citi has many global corporations as clients and PayPal has millions of consumer clients under the PayPal and Venmo brands. The announcement focuses on the application of providing pay to gig workers, but the payment solution could work for any number of B2C or government-to-consumer transactions. PaymentsSource reported:
Citi’s network of multinational corporate clients, financial institution partners and public sector organizations will Citi to make payments directly into their customers’ PayPal digital wallets through Citi’s Worldlink cross-border payments platform. PayPal’s clients will have access to funds faster.
By combining forces, PayPal and Citigroup can add flexibility for cross-border payments to counter firms such as Payoneer and TransferWise. TransferWise has added partnerships with financial institutions to give users the ability to initiate transfers without leaving the financial institution’s mobile app. And Payoneer just added B2B to its core gig economy payment service. Other gig economy firms such as Tipalti have also drawn investment to diversify.
“Expectations for gig economy growth over the next decade are pretty high,” said Steve Murphy, director of the commercial and enterprise payments advisory group at Mercator, adding Citi is one of the largest global corporate banks in the industry. “It’s good for PayPal’s access to corporates. And PayPal has lots of global clients, so it’s good for Citi to head off disintermediation as these other fintechs try to get into the B2B space.”
Cross border payments are beneficial for both the payee and payer. It allows access to funds faster, adding flexibility to payments companies. This new development gives the ability to initiate transfers within the mobile app. Consequently, it will have a positive effect on businesses internationally.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group