Consumer and merchant expectations are changing. The world is becoming increasingly digital and interconnected. Constant evolution is making people’s lives easier, and this sets high expectations. As a result, consumers and merchants are demanding speed, ease, and security across all devices and all services – and this extends to payments, whether these are made domestically or across borders.
With global ecommerce sales projected to reach USD 6 trillion by 2024, ecommerce growth is shaping the way we pay. 65% of ecommerce sales are transacted on a mobile device, and 80% of customers are interested in faster options to pay and be paid by businesses. 68% of sellers would become premium sellers to get paid in real time, according to research1, and this is especially the case within the cross-border market.
Apart from the well-known SWIFT, in recent years, the large card networks have also focused on bringing out more innovative, faster methods of moving money across borders, by leveraging card rails. Products like Visa Direct and Mastercard Send promise speedy, transparent, and frictionless cross-border money movement. Further to these, there are a wider variety of e-wallets that can facilitate multiple use cases within the cross-border space today. Many of these payment methods aim to facilitate cross-border payins and payouts in a frictionless, transparent, and cost-effective way, sometimes even instantly, and with the added benefit of funds receipt acknowledgment. This, in particular, is an area where legacy cross-border money movement companies fall short.
While still in their relative infancy yet continuing to evolve at a rapid pace, Open Banking APIs also hold much promise when it comes to revolutionising the cross-border payments space. Aside from the benefits associated with payment speed, transparency, and ease, Open Banking-enabled payments also bring additional KYC improvements, allowing businesses and banks to reduce the risks associated with transacting internationally. APIs can be used to check a customer’s identity or whether they can afford a transaction, for instance, enabling institutions to set precise limits.
A number of challenges exist within the cross-border payout market today:
UX – the user experience when making cross-border payments leaves much to be desired in many cases. The process is not often straightforward or intuitive, which can cause a lot of friction.
Cost – typically, there is a great cost to merchants and consumers.
Transparency – both when it comes to fees and where the funds are at any given point.
Speed – cross-border payouts usually take multiple days to clear. In 2017, for 56% of disbursements, it took between 2 days to 14 days for recipients to receive their funds.
Multiple processes – merchants have to manage a number of different processes, especially when the payment is sent across borders.
Thus, modern businesses need fast, intuitive digital experiences, with real-time payment capabilities integrated directly into existing apps, websites, or payment solutions – all functional at a global scale. Visa Direct and Mastercard Send offer a great alternative to legacy systems, and the benefits they provide help mitigate the challenges typically associated with cross-border payments. Because these systems have been built for the modern age of money movement, they do not rely on legacy bank technology, completely bypassing the correspondent banking messaging system created by SWIFT. As such, they offer lower costs, superior customer UX for both the beneficiary and the remitter, real-time money movement worldwide to billions of financial accounts, and end-to-end security and a compliance framework for both senders and receivers that is immediately available, without complex integration or implementation effort.
We believe that instant cross-border payouts to consumer accounts leveraging card networks are helping to further drive the evolution of payments. Moreover, we are certain that instant payouts to cards are here to stay, enabling speedy payments across a variety of use cases and supporting both domestic and cross-border payments underpinned by secure and reliable global networks. They help drive digital experiences and provide frictionless, secure, superior customer experience while enabling real-time transfers 24/7 with funds available to eligible debit or prepaid cards in as little as 30 minutes.
It’s important for merchants to work with a payment partner who is globally connected, innovative, and flexible, as instant payouts to cards have real potential to accelerate revenues for them. So merchants will seek to work closely with payment technology companies to ensure they are enabling cross-border instant payouts for their customers – or risk falling behind.
Customer experience when it comes to payments is key for gaining and retaining customer loyalty, increasing conversions, and ultimately accelerating revenue for merchants. Creating a frictionless, intuitive, and mobile-enabled customer experience is no mean feat, and working with the right payment partner is key to achieving it.
At Nuvei, we work closely with our merchant clients to understand their needs and their customers’ payment preferences, while constantly optimising our solutions to deliver against these. By being flexible and agile, we provide the payment technology and insights our customers and partners need to succeed locally and globally, with one integration. Enabling our merchants to offer their customers a superior digital customer experience ensures they can extract more revenue out of every transaction, whether domestic or across borders.
1.The State Of Consumer Disbursements: Who Paid Consumers — And How Quickly, PYMNTS & InGo Money, 2021
This editorial piece was first published in The Paypers' Cross-Border Payments and Ecommerce Report 2022–2023, which taps into the fast-growing cross-border market and provides a comprehensive overview of trends and developments that are pivotal in this space, being the ultimate source of information for ecommerce businesses interested in expanding globally.
Jasper has 15 years of commercial experience within a diverse range of companies. As Vice President of Sales at Nuvei, Jasper is currently building out his business development team across EMEA and is looking forward to having conversations about how Nuvei could help support businesses across the financial services industry with next-generation payment technology.
About Nuvei
Nuvei is tomorrow’s payment platform. Designed to accelerate customers’ business, Nuvei’s modular, flexible, and scalable technology allows leading companies to accept next-gen payments, offer all payout options, and benefit from card issuing, banking, risk, and fraud management services.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now