The cross-border payments landscape has witnessed remarkable growth and transformation in recent years. The global nature of business, the rise of ecommerce and SAAS companies, along with so many different services and product being offered from overseas, have fueled the demand for efficient and reliable payment solutions that can seamlessly facilitate international transactions. In this dynamic environment, a few companies stand out at the forefront, empowering businesses to navigate the complexities of cross-border payments.
The market for cross-border payments is immense and continues to expand rapidly. According to recent research conducted by BCC, the cross-border payments market is projected to grow from USD 176.5 billion in 2021 to USD 238.8 billion, in 2027. The vast potential of the market seems to be growing, but the competition also reflects that more and more players want a piece of the cake.
The environment is highly competitive, with several players striving to capture the immense opportunities offered by cross-border payments. Key competitors include established financial institutions, fintech startups, payments institutions, and even tech giants already present or expanding into the payments sector.
Previously, offering good coverage worldwide was the main strong point of a company whereas now, excellence in services and products is ruling. The trend was determined by enterprise-size merchants that were once happy with a service that would solve the pain in processing locally in many countries as possible. Now, the same enterprise-size merchants are pushing for specialisation, better products, enhanced conversion rates, and lower prices.
In this challenging environment, innovation is the driving force behind succeeding. The importance of staying ahead of the curve by embracing emerging technologies and continuously improving the services is crucial. Companies that will stand out will need to innovate in all areas of the business.
The adoption of cutting-edge technologies such as blockchains/stable coins, artificial intelligence (AI), machine learning, new ways of moving money around the world faster, and better pricing will separate the good and the best among B2B payment processors.
The elimination of intermediaries and smart contracts will also ensure that cross-border payments are executed seamlessly, reducing the cost associated with traditional methods. This is another trend seen latest by enterprise size merchants: to connect directly with specialised payment companies to succeed in these criteria.
Payment processing is not enough anymore. Merchants want the processors to analyse data, identify patterns, and optimise the services and payment processing based on thorough analysis. This allows for highly customised solutions, tailored to clients' unique needs, further enhancing their experience.
At the same time, collaboration plays a crucial role in the B2B cross-border payment industry. The ones that have not yet realised that enabling stakeholders to work together to address the challenges and complexities associated with international transactions is the only way to move forward and continue to being part of the highly competitive environment, will be soon eliminated from the game.
Collaboration within the B2B cross-border payment industry drives innovation, enhances operational efficiency, and promotes secure and seamless payment experiences for businesses engaged in international transactions. By working together, stakeholders can address the complexities of cross-border payments and drive the industry forward.
To stay ahead in this market, attract investors and skilled professionals, maintain a great business culture that cares about the environment, while also competing with reduced margins, is the biggest challenge for B2B cross-border payments companies ahead. Those that are already surfing in this new environment are the ones that will succeed and explain what the future will expect for all the industry players.
Brazil has implemented improvements on the cross-border payment regulation in the 30 December 2022, with the Central Bank of Brazil overseeing these transactions. The regulatory framework for the FX market along with the local regulation for payments give more transparency, compliance, and speed on cross-border payment processing, especially with PIX.
The complexity of the Brazilian market, including currency exchange, local payment infrastructure, and regulatory requirements, can impact the efficiency and cost-effectiveness of cross-border payments.
The increased competition and innovation, driven by both traditional financial institutions, fintech startups and improvement in regulation resulted in improved services, lower costs, and faster transaction times.
Companies looking to enter the Brazilian market should consider the competitive landscape and potential for innovation. But understanding local payment preferences is vital when considering the Brazil model for cross-border payments. Brazil has its payment systems, such as PIX, which is an instant payment system widely adopted domestically. Additionally, local people and local specialised processors help breaking barriers and the necessary tools for those looking to achieve the biggest consuming market in Latin America.
Fernanda Zago is a specialist in cross-border payments with more than ten years of experience in the payments industry and the CEO of WEpayments, a fintech company specialising in instant and cross-border payments of high volumes. She has a degree in business administration with emphasis in finance and is specialised in business and in Business Marketing.
WEpayments is a Brazilian fintech focused on high volumes of payments and cross-border, that offers highly technological solutions to help international companies to pay or receive payments in Brazil.
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