The cross border payments space continues to attract both non-traditional and traditional players. Western Union could be thought of as traditional as it gets, having been in the x-border remittance business now for decades. In this posting, appearing in Digital Commerce 360, the announcement is about the launch of a Western Union built, white labeled B2B platform for Amazon, which is being called Amazon PayCode.
‘Ecommerce has made it easier for B2B suppliers to do business with buyers in other countries, but it has not eliminated the difficulties of receiving cross-border payments. It can take weeks, in some cases, for B2B sellers to receive payment. In addition, sellers incur currency conversion fees, and cross-border bank remittances made on Friday or the day before a holiday won’t be processed until the next business day, at the earliest.’
Targeted for small business B2B e-commerce and cross border payments, the system seems to be an odd paradigm mix of the old and new. Once selecting Amazon PayCode at checkout, at which point a QR code is issued. The odd part is that you must then take this QR code to a physical WU agent location, get the QR code validated with authentication, make a cash payment, after which an e-mail confirmation of the shipment will be sent to the buyer. This is basically the description in the piece, and then after looking at the Amazon site, it appears to be the case. So I guess you can call this e2f2f-commerce. Obviously one would think that a fair amount of research and testing went into this product launch, so we must assume it has appeal and will be interesting to follow up on takeup. It seems logical that small business buyers in developing countries would find use, since more likely to be unbanked or un-carded, so to speak. This calls to mind efforts in India to support the kiranas, or mom and pop shops.
‘Much like consumers, many B2B buyers in other countries prefer not use a credit card to pay for an ecommerce purchase. Alternatively, these buyers would pay for their purchase using a bank remittance. To complete such a transaction, the supplier’s bank and the buyer’s bank must have a connection over which funds, and the accompanying transaction data, can move digitally between one another. Unfortunately, such connections between financial institutions around the world are not universal, Loevenguth says. Consequently, a buyer in one country may not be able to transfer funds using his bank to a supplier’s bank in another country.’
We have not had a chance to speak with the principals involved, but will provide an update once we learn more about progress.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
