A recent article from Digital Commerce 360 looks at cross-border payments, which is a fast-growing channel within the payments landscape. It’s written by a senior executive at Euronet Worldwide, a cross-border payments network that provides various card payments-related services. The author covers pandemic-related issues—particularly supply chain disruption—which continues to this day. And it covers the lack of easily used payment rails to expand relationships across the globe. It cites a recent study for which a link is provided.
Developing Markets for Cross-Border Payments
This is most clearly recognized in developing markets where legacy infrastructure doesn’t necessarily serve them well enough. The most glaring example of supply chain disruption is China. Ongoing lockdowns have caused many companies to seek other markets. They seek reliable production of goods to fit their supply chain needs. The alternative markets mentioned include Bangladesh, India, and Mexico. There is also a link out to a supply chain working group paper. It summarizes efforts between the U.S. and Mexico about rebuilding supply chains.
Legacy Cross-Border Payments Infrastructure
The author then gets into the specifics of legacy infrastructure shortcomings. This includes the multiple bank and account requirements, with the resulting lack of speed and transparency. We have covered this often. Member research most recently covered this. We point out the many ways cross-border payments are improving. We then go into how companies can resolve some of these issues, especially in emerging markets where many banks and fintechs have little or no expertise. This general solution set is related to next generation payments infrastructure, which then allows for more modern experiences such as preference for mobile transactions, a key entry requirement for emerging markets. So the combination of better eCommerce platforms and improved infrastructure will allow companies to further penetrate foreign markets and allow for greater supply chain resilience.
As we continue to see more innovation in cross-border payments, including B2B scenarios, and as Commerce growth continues to expand, this would seem like reasonable advise for those seeking a good forward strategy. Certainly worth a quick read for those seeking information on the subject, especially given economic forecasts that look unpromising during the coming year.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group.
