How Innovative Payment Orchestration Solutions Are Fueling International Trade
Updated: Nov 13
The world is becoming ever closer with technology making things more accessible as time goes on. Innovative cross-border payment orchestration solutions are changing the international trade landscape as they look to ensure cross-border payments go through without a hitch. From the almost 19 trillion dollar e-commerce sector to other niches like FinTech, LegalTech, cryptocurrency trading, and FOREX trading, the need for seamless cross-border payment orchestration is at an all-time high.
The world is becoming more and more digital by the second, and businesses worldwide are overhauling their interfaces to ensure a better user experience. That’s why there is a growing need for solutions that allow companies to securely accept various payment methods that match their customers’ preferences. According to Zed Founder and entrepreneur Alan Safahi, startups knowing the ropes to safe international transactions can be a complex task as they have to comply with anti-money laundering (AML) and know your customer (KYC) requirements. While also having the ability to screen transactions for fraud and supporting localized payment methods.
All this can be a bit too overwhelming for a startup, and that’s where Zed Network steps in with a comprehensive payment orchestration layer that makes cross-border transactions a breeze. Having a payment orchestration layer on top of your current business infrastructure will help you effectively authorize, optimize and process payments. Now you may be wondering how is cross-border payment innovation helping international trade? Well, that’s what we will explain in the following passages. So let’s begin!
Technology Can Solve The Cross-Border Payment Issues
While most US consumers use debit and credit cards to make their payments when buying something, that is simply not the case for the rest of the world. Businesses now understand that to ensure international success, they need to integrate and accommodate local payment preferences. Take China, for example. The majority of the population there do not prefer using card-based payments.
Instead, around 86 percent of all consumers pay using digital wallets. This is a common trend in other emerging markets as well.
Along with that, companies looking to expand their operation in markets like Latin America find it exceedingly hard to have card-based payments as the only means of accepting payments. In Latin America, only 27 percent of consumers own credit cards, and anywhere from 25 percent to 40 percent of the total eCommerce transactions are made using cash. So businesses look to partner with local payment service providers to ensure cross-border payments.
However, merely partnering with a PSP doesn’t solve the entire cross-border payment issue. There are several other things at play here. Fraud and data security risks to exchange rate volatility and chargebacks all contribute to creating friction in international transactions. These frictions can be devastating for businesses with acceptable profit margins like the recreation, entertainment, and retail sectors. Mitigating these risks requires managing relationships with multiple PSPs to keep the operational costs to a minimum while maximizing profitability with each transaction.
However, keeping up with the PSPs is a monumental task, especially for a company that deals with a high volume of international transactions like FinTech and FOREX trading companies. And by the time they realize their shortcomings, it can become too late to recover. Because of this reason, most companies that deal with a lot of international transactions work with companies that provide complete payment orchestration layers. These companies help ease all the friction there is between cross-border payments by integrating innovative payment orchestration layers.
Virtual Cash Management Is The Industry Standard
The world is becoming more intelligent by the day and so are businesses. While it was possible to should the burden of time-consuming and costly frictions of cross-border payments before, now companies look to offload that or outsource it to focus on pressing matters.
According to Alan, traditional B2B payment methods such as wire transfers are exceedingly difficult to navigate when another country is involved. While we cannot say that we are in a post-pandemic world, we can say we are recovering from a pandemic-ridden world. While Fintech companies are scrambling to provide end-to-end accounting solutions, they require perfect cross-border payment solutions as many of their clients are in emerging markets. As time goes on, virtual cards are becoming popular and are now considered a dominant B2B payment method.
Meaningful modernization in Fintech makes virtual cash management easily accessible as businesses can now find accounts payable (AP) and account receivable (AR) space as the next logical step towards automation. The integration of automation tools and the fast-developing world of AI vastly influences the world’s need for cross-border B2B payment processes. Payment orchestration providers help import and export companies save time and resources required to finalize attached documents and categorize relevant payment data.
Companies fast realize the need for financial automation to ensure transparency across borders and for monitoring cash flows. According to researchers, 55 to 65 percent of small and medium firms believe that manual payments are error-laden and time-draining. They see automation as the next step, and a comprehensive payment orchestration layer that simplifies cross-border payments is the catalyst for it.
The Emergence Of Payment Optimization Tools
If you want an import/export business to deploy or design any effective strategies effectively, you need a custom payment orchestration layer added to your firm’s payments stack. Payment orchestration allows for effortless analysis and management of payments systems. The best payment orchestration providers usually provide API solutions that enable international businesses to add or remove payment methods as they please and manage the connections they share with their various PSPs from a single platform.
APIs make everything simple as businesses do not have to invest in massive reprogramming efforts and ongoing maintenance when operating a payment orchestration layer. There are plenty of API solutions that integrate artificial intelligence (AI) and machine learning (ML) tools to ensure easy and correct AML/KYC screening standards and facilitate cross-border payments that process exchange rate differences automatically. Because it’s all digital, that means you can use the data from the POP and utilize analytics to understand your position in the market better.
Simply by having a combination of these tools, you can store and analyze information, including transactional data, profitability, payment speed, and other critical logistical factors, meaning you can optimize your business perfectly. As you can see, emerging technologies like advanced data analytics, AI, ML, APIs, and other technologies are changing how people perceive payment orchestration solutions. As time goes by, it is becoming more accessible and easier to improve cross-border payments and maximize revenues.
B2B Services Merging With Consumer Payment Experiences
If you look back a few years, you will see how the P2P services for payment were fast developing to meet consumer demand. That demand is now driving the B2B payment needs. As more and more businesses start partnering up, the need to send cross-border payments as fast as domestic ones have increased exponentially. In cases like this, the need for a global third-party payment provider that can create complete payment orchestration layers allows for frictionless transactions and seamless business operations.
Modern businesses rely on digital financing infrastructure, and with the world moving fast, even during the pandemic, businesses were hard-pressed to find perfect orchestration layers. International companies are always on the hunt for solutions dealing with international currencies and an ever-stricter global regulatory climate easier. The recent innovation in payment orchestration technology is facilitating the global B2B demand for cross-border payments.
Payment Orchestration Is The Future
The world economy is fast merging into one single entity, and because of that, the need for comprehensive payment orchestration solutions is in high demand. We here at the Zed Network provide just that. We cover more than 150 different currencies and operate within 100+ countries worldwide, including significant trade hubs. So if you are a global business in need of the perfect payment orchestration layer, please contact us.
And with that being said, that’s all we have for you today. Let us know your thoughts on the impact of the payment orchestration layer on international businesses. Also, hit us up on our socials to send us your ideas and suggestion on what we should talk about next. We will come back with something new for you soon. Until then, see ya!