How Important are Faster Payments?
Instant payments are almost a prerequisite in the United States or Europe. But this isn’t the case with most developing countries. Rather, it is electronic payments security that gets more attention over faster payments. Security threats over financial transactions can wreak havoc and ruin a business. In both developed and developing countries, the sender and recipient want payment security more than faster payments. What matters most is the security and transparency of payments be it via ACH (eCheck), or and credit card. Guarantee security of transactions and customers are comfortable to receive payments even after a day or two later.
Of course, the quicker the better! Given the rising need for secure payments, there sometimes doesn’t seem to be much demand from customers for faster payments.
Related: Retail Payment Trends in 2016
International Payment Complexities
International business-to-business (B2B) payments involve a lot of complexities and processes, from finalizing payment terms to sending an invoice to processing. As a result, instant transactions are the least expected. In some cases, international business transactions will need to have language translation services implemented to help communication between businesses. This will help negate misunderstandings with vital information and payment processes.
This means transactions between the buyer and supplier are not expected to be instant and the recipient is okay with a one or two day payment schedule. Nevertheless, it is important that they fit within the cash flow predictions of the company, ensuring that no security threat compromises with that timescale.
Related: The 3 Biggest Payment Methods in the World.
The Challenges
B2B corporations conducting business overseas aren’t familiar with all the nuts and bolts behind the operation of the cross-border transaction process and how their money reaches a recipient sitting across the borders. Which is why there are companies like Peak PEO (click here to find out more!) who offer services that could handle all the back-office grind of payroll, benefits, tax, reporting, employment contracts, etc.
Corporate houses should acknowledge these unique challenges for frictionless global payments. Remember, confusion could cause friction, and friction could lead to a loss in revenue.
Some of the key differentiators in a global payment service include bank closures in the event of political turmoil. These are the times when it is not possible to make the payment system work and receive or send money. Additionally, in some developing countries, there are frequent power outages, and therefore the payment system doesn’t work as seamlessly as it ought to be.
No doubt, faster payments are a value-added benefit, but it is critical to take requisites of other markets into account for frictionless electronic payments.
A lack of transparency in the corporate payments space could be a matter of concern, since the funds pass through numerous hands before being delivered to the ultimate beneficiary.
Related: Same Day ACH Causing Fears for Some Banks.
It is important for international businesses to pay special attention to the entire global payments process and figure out how a payment moves from one point to another. Prioritizing security over faster payments could give you enough reasons to make most customers happy.
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