Integrating cross-border solutions as emerging markets drive business

As many businesses expand into the emerging markets, cross-border payment solutions are the linchpin for companies seeking to expand their horizons, writes Sophie Flynn.

In today’s interconnected world, innovative businesses can no longer thrive within their national borders alone. As emerging markets like the Middle East and Latin America (LatAm) invite further expansion of businesses, efficient cross-border payment solutions are key to business success.

Global expansion drives the need for efficient cross-border payments

Globalisation has opened the doors for companies to access international customers and tap into previously untapped markets. Characterised as having higher growth potential due to rising consumer classes, rapid urbanisation, and underserved populations, previously untapped sectors are providing many new opportunities for businesses looking to expand globally and leverage a completely new customer base.

The Middle East, for example, is driving expansion for thousands of businesses as industry leaders seek growth opportunities. More specifically, Abu Dhabi has a significant portion of the population that does not use traditional banking services. This presents a major opportunity for fintechs to offer innovative products tailored to the “unbanked”. By designing accessible digital banking tools, these companies can drive greater financial inclusion and bring more people and businesses into the formal banking system.

Furthermore, the drive to enhance end-to-end money transfers for immediacy, security, and transparency across borders keeps the payment industry focused on enhancing user experiences. Integrating digital innovations into conventional clearing systems to upgrade existing technology is one avenue. Simultaneously, the creation of localised forward-thinking solutions such as real-time payments and digital wallets represents another approach. These ongoing digital trends will shape the future, ushering in fresh technologies and diverse non-bank payment providers.

Friction points within the cross-border payments network

Despite the benefits, as businesses expand into emerging markets, there are friction points in the current cross-border transaction network that present some challenges. Traditional payment methods are typically sluggish, taking days or weeks to fully settle, and lagging far behind the speed needed to facilitate the ideal – real-time global commerce.

With many global companies experiencing monthly revenue delays due to inefficiencies in fragmented payments, the current cross-border payments network lacks a seamless end-to-end system, and therefore often incurs elevated transaction fees and extended processing times compared to domestic payments.

by Sophie Flynn