Operations across international borders essentially add layers of complexity and fees to B2B operations.
However, despite historic rates of global expansion, innovations in real-time payment (RTP) networks and digital-first interoperability solutions are helping businesses of all sizes make the leap to intercontinental commerce.
This, as Brazil and Argentina are reportedly exploring a “currency union” to facilitate trade payments between the two countries. Meanwhile, just last week in Davos, the next-generation global RTP network was launched.
While the hot streets of São Paulo and Buenos Aires may have little in common with the affluent Alpine mountain enclave of Davos, both initiatives highlight the growing interest in interoperable, cross-border payment networks.
After all, creating an efficient ecosystem for international B2B transactions is largely about bridging borders and establishing commonalities, regardless of the miles or contrasts between them.
All-in-One and One-for-all
Nine out of ten small and medium business (SMB) owners said that all-in-one payment platforms for B2B transactions save time and are more convenient, according to a PYMNTS study.
Cross-market and cross-border interoperability can help smooth and resolve the wide range of payment and reconciliation conflicts for international engagements, which typically include foreign exchange (FX) discrepancies, reconciliation discrepancies from encrypted data, payment delays, and the round-sticker, square-Operational barriers that exist with each other. between businesses transacting across borders.
Big-ticket B2B transactions originating from abroad often incur additional costs associated with cross-border payments between businesses, including higher transaction fees and intermediary and beneficiary bank fees.
Individually, aging technology infrastructure and outdated software often leave businesses vulnerable to pitfalls in their own accounting systems, lead to ongoing compatibility conflicts, and even slow down critical business operations in ways that create resentment for relationship-damaging vendors.
Seamless collaboration between ecosystem partners is critical to successful and repeatable B2B transactions.
PYMNTS research in The One-Stop Bill Pay Playbook finds that confusing payment interfaces for payers and missing functionality for payees are among the top complaints in B2B transactions.
Better outdoors than indoors
B2B payment interoperability is generally considered a much more attractive feature when transacting internationally. This is because intra-market interoperability, or internal payment ecosystems, allow out-of-network banks and financial institutions to compete for the same business. In addition, cross-border interoperability better supports transactions that are paid for and received in currencies that differ from an organization’s internal fiat.
That’s the goal of the Universal Digital Payments Network unveiled in Davos, as well as the proposed digital zonal currency proposed in Latin America: interoperability between regulated stablecoins or central bank digital currencies (CBDCs).
These digital currencies are designed to translate the benefits of the so-called digital dollar, including hyper-fast RTP settlement speeds and smaller processing fees, to international financial transactions. The use of digital stablecoins is meant to reduce and ideally completely remove foreign exchange friction while helping to realize near-instant settlement times.
In a new report from PYMNTS and Payoneer, “International B2B Payments: a guide for entrepreneurs and digital businesses’ found that more than three in four (77%) SMEs are unhappy with their current cross-border payment solutions and want to explore. solutions that improve accounts receivable (AR) processes as they relate to international transactions.
Interoperability of payment systems promises to provide smoother cross-border commerce and a more seamless experience on both sides of the transaction.
Read more. EU digital wallets attract global card networks, seek interoperability
Late payments threaten cash flow for businesses of all shapes, industries and sizes. PYMNTS previously reported that businesses hold nearly $1 trillion in unpaid B2B invoices for their suppliers.
Real-time access to funds is more important than ever in today’s modern economic environment, where waiting days for wire transfers to clear or currencies to be exchanged—both common delays in international B2B transactions—can inadvertently slow down a company’s operations. and even a critical impediment to future growth.
In the report Cross-Border Payments for Digital Native Companies, PYMNTS research shows that lack of access to financial services that can boost their international reach, such as cross-border payment tools, is a key barrier to global growth for many businesses.
A lack of adequate banking infrastructure to manage global transactions can similarly stall revenue growth or cause liquidity management problems.
The ability to monitor global transactions for compliance, fraud and user experience risk is also critical for companies seeking to sustain cross-border business growth.
Innovation has always been the future-first way to manage the complexity of international growth, and interoperable, RTP networks offer compelling solutions to a growing list of pressing challenges and can help ensure that the risks of doing business across borders are not diminished. financial benefits of expansion.
PYMNTS data. Why are consumers trying digital wallets?
PYMNTS “New payment options: