Shapeshifting: A Look at The Evolving Landscape of Cross-Border Payments
Shapeshifting: A Look at The Evolving Landscape of Cross-Border Payments
Shapeshifting: A Look at The Evolving Landscape of Cross-Border Payments
2019 is shaping up to be an are eager to satisfy the adapting user experience, but with all the
interesting year in many aspects. needs of consumers and clients trimmings of a modern payments/
The combination of regulatory alike. The use of technology card provider alternative, is an
changes, adoption of new such as QR codes and facial interesting move in the context of
technologies and increased flow of recognition in order to enhance the tech giants moving into the
new entrants are influencing the payments experience has provided payments space and illustrates
habits and processes of businesses a platform for providers like where the sector could be headed.
and consumers worldwide. Driven WeChat and Alipay to revolutionise The user experience and trust in
by increased globalism and payments in Asia. The rise of tech the brand equals comfort and
access for both consumers and organisations outside financial convenience which could mean
businesses alike to engage in services turning their hand to rapid adoption of the Apple card is
international trade, this has forced payments using their existing not out of the question.
some to adapt to change and customer-experience ethos, mass
spurred others to drive it. market reach and technology, has With convenience the currency of
enabled them to attract a share of today, it is understandable how
The changes in consumer a lucrative industry outside their leading businesses like Apple and
expectations have driven an usual remit - further exemplifying Amazon can transition into
emergence of new payments the opportunity at hand. The payments and provide financial
providers and the evolution of launch of the Apple Card is one products quickly, simply by
current ones. Whether harnessing such example. leveraging their existing
existing technology in innovative technology and vast insight into
ways or developing new The concept of providing a customer data. By introducing their
technology altogether to gain competitive financial product users to a new, carefully targeted
a competitive edge, businesses combined with Apple’s focus on and convenient range of financial
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Shapeshifting – a look at the evolving landscape of cross-border payments
products, their potential volume of regardless of the type or value the ways in which B2C uses
adoption has the power to disrupt of transaction and has led to the technology to satisfy and even pre-
the way the masses consume entrance of new and existing empt changing customer needs.
these products in the future. FinTech companies all vying for a Of course, there’s a clear link,
piece of the action, keen to disrupt customers are driving the demand
the status quo. for B2C businesses to deliver a
seamless payment experience,
In international e-commerce in which in turn, demands the need
particular, the way payments for transparent and secure B2B
are facilitated is crucial to being payment networks.
competitive, with research finding
that typical cart abandonment In 2019, it is now clear that the
rates are around 75%, and of components necessary for
those, concerns around payment businesses to stay ahead are
18%
security or poor checkout strongly tied to the experience,
processes made up 62% of and that payments are very much
those that were abandoned** . included. Businesses need to
This illustrates the power of the ensure they are working with
customer, and the direct impact payment providers who have
that the payment experience can technology that keeps ahead of
In 2018 alone, have on revenue if not built to the ever-changing regulations and
global e-commerce payments buyer expectations. competitive landscape, but also
increasing by 18% works to optimise the payments
As a result, B2C payments have process for them and their
had to move quickly to innovate customers, otherwise risking
and incorporate these changing significant damage to their
demands, however, B2B payments revenue.
have followed more cautiously
So, what is behind this FinTech in their footsteps, monitoring
boom? It seems that consumer
“
habits globally have changed
drastically and non-payments
businesses have taken notice,
looking for ways to embed
themselves deeper into their
Typical cart
customers lives and wallets
through evolution of their existing
offerings and technology.
abandonment rates
Today’s consumers have different
expectations as per the NOW
economy model*, demanding
are around 75%
tailored, transparent and efficient
experiences across every
purchasing journey (examples of
NOW economy innovators like
Uber and Airbnb have completely
changed the traditional landscape
of their respective sectors).
Furthermore, global e-commerce
continues to grow, and with
increasing volumes of lower value
transactions, customers are
demanding fast, trackable
payments and aren’t afraid to
take their business elsewhere. This
drives the need for consistently
seamless payment experiences
** https://www.annexcloud.com/blog/31-shopping-cart-abandonment-statistics-for-2018/
* https://www.oracle.com/assets/comm-ready-now-economy-wp-3097355.pdf
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Shapeshifting – a look at the evolving landscape of cross-border payments
“The introduction of
to be well discussed in the
financial services industry. With
speculation on what exactly it will
mean for businesses in the sector,
there are also growing numbers
actively looking to collaborate with
open-banking and
agile FinTech firms, enabling them
to stay ahead of incoming regulations around
changes.
* https://www.pymnts.com/news/retail/2019/merchants-cnp-fraud-customer-data/
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Shapeshifting – a look at the evolving landscape of cross-border payments
such as 3D Secure 2.0 (3DS), payments should look at this the technology already exists,
a protocol designed to protect change, as with all change, as particularly through partnerships.
CNP transactions using machine both a journey and opportunity to PSD2 provides an opportunity
learning algorithms for better risk seize innovation and a chance to for innovation whereby financial
assessment. 3DS could have a reassess systems and processes in institutions and FinTech can and
significantly positive impact for order to future-proof – there may should work together to achieve
acquirers and merchants by be no need to create bespoke or mutually beneficial goals and
reducing checkout times, customer in-house systems when ensure longevity.
service costs and mitigating
fraud. The use of a tool of this
type would also mean that the
SCA process would be required
for less transactions due to better
risk analysis, illustrating how
providers are quickly innovating to
find clever ways for their clients to
meet their PSD2 risk obligation.
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Shapeshifting – a look at the evolving landscape of cross-border payments
Understanding risk:
local and global
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Shapeshifting – a look at the evolving landscape of cross-border payments
Today’s globally interlinked world streamline business operations receive optimum benefit from.
is the direct cause of commercial is the possibility of sending these It is important that there is a
globalisation with a 200% growth transaction requests in any format two-way conversation between
in international e-commerce, and for the payment provider to the developers and the key
global businesses with employees convert via their API. stakeholders on both sides of the
scattered around the world. This product to ensure that business
has created increasing volumes For businesses that can connect objectives are aligned to meet
of low value global payments, via API, this clean and simple expectations.
and businesses, much like their interface incorporated into a
own customers, are continuing to business’s existing systems is For those businesses who make
demand faster, more seamless and key. The plugin will ensure that corporate payments, developers
efficient systems to settle funds, reporting, business analysis and product managers don’t have
while also having full visibility of and workflow monitoring the time or bandwidth to wade
where these are at all times. With remain consistent, and that the through oceans of documentation,
this in mind, it is no surprise that connectivity of the software therefore, it is imperative when
powerful technology must sit at creates a closed-loop environment choosing a supplier that clean
the heart of robust and seamless enabling convenient payment APIs are provided with relevant
payment networks. requests. In addition, a powerful and concise documentation. This
API should contain a function assists in easy implementation
Payments make up just one allowing businesses to request of the software, and a smooth
of the many critical parts of country specific fields, ensuring transition to the new system, also
complex business operations, and payments are pre-validated with defining where the API provides
while businesses want to stay the required information before value in the overall payment value
ahead in the payments game, they go out. chain.
the complexities of migrating
existing processes to an API Software providers should offer Collaboration and smooth
(Application Programme Interface) an API that has their customers’ communication between the
based system can be daunting, interests and goals at heart; client and the service provider is
particularly when the business identifying their needs, who extremely important to ensure that
may not have in-house treasury is consuming the technology, the final product has maximum
systems that can plug into an API, and for which purpose. This benefit to the client with minimum
and are used to communicating understanding of the client and disruption, and results in a
payments via SWIFT messaging, their product are key to creating an long-term, mutually beneficial
or spreadsheets. In this case, ecosystem, interlinking processes relationship.
a key component to help that the business is going to
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Shapeshifting – a look at the evolving landscape of cross-border payments
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Shapeshifting – a look at the evolving landscape of cross-border payments
27%
transaction revenue from cross-
border payments, which has risen growth in cross-
by 27%.
border payments
Businesses are becoming truly
global and payments have become
key to every international business
model, be it a marketplace, service
provider, or even a bank. Now
more than ever, it is important
B2C
for businesses to move their
processes with the times, as
inefficient and expensive payment customers dictating
methods will play a major role in
whether a business is profitable payments expectations
and remains competitive. A
customer who is trying to checkout
at an online retail store but comes
up against roadblocks is likely
to leave without returning, their
negative experience having a
30%
damaging effect on business’s
the bottom line, particularly when
negative feedback is rife on social growth in
media.
e-commerce
When it comes to protecting
revenue, it is not only B2C, but
also B2B businesses dealing with
cross-border payments that need
to consider the expectations of a
seamless payment process and
demand better pricing and real-
time updates. There are cross-
border network providers who
have reach for local payments to
almost any bank account in the
world and can mitigate local risks
using bank grade compliance
and country-specific regulation
to satisfy the needs of those
transacting in the growing world of
global payments.
* https://ecommercenews.eu/51-uk-consumers-prefer-to-shop-online-than-in-store/
https://www.wto.org/english/res_e/statis_e/wts2018_e/wts2018chapter03_e.pdf
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