B2B Payments

Shedding Light On FX And Supply Chain Risks Amid Cross-Border Payments

Smaller firms are boosting their overseas business activity, leading them to be exposed to FX swings and trading partner risk. New options and initiatives, such as prepaid cards and a newly launched digital effort by Mastercard, look to mitigate those issues.

As FinTechs step into the cross-border payments and foreign exchange (FX) management space, there are more solutions available than ever before for corporates seeking to gain speed and security in payments – and manage risk along the way.

To that end, Deutsche Bank’s Global Transaction Banking Unit released a report that shows faster payments are spurring corporate treasurers to get a bit faster, too. Adopting real-time business processes has led them to embrace real-time FX management.

The Deutsche report cites data from Euromoney, which shows that as many as two thirds of executives have interest in adopting automated, round-the-clock currency conversion activities. Along with real-time conversions comes the need for real-time FX volatility management. Other areas of real-time processes include cash and liquidity management.

This embrace comes as corporates are just starting to work with faster payments. Data from NACHA – The Electronic Payments Association shows that roughly 6 percent of the two million same-day ACH transactions made in the 11 days since launch were B2B transactions, signaling room for growth.

In further illustration of the trend toward looking at FX risk, as spotlighted in these pages in recent days, the movement of goods and suppliers overseas (and as road warriors log miles), Jay Wissema, director of business development at cross-border payment solutions provider Volopa, said that trade disputes and other events such as Brexit show the importance of such risk management.

Despite surveys from the likes of American Express, that optimism about cross-border activity remains high among small business owners, as the same large-scale events have caused them to change their cross-border business strategies in the wake of trade disputes, for example. Wissema told PYMNTS that prepaid cards can be an effective tool in risk management, as the cards pre-load multiple currencies at pre-determined exchange rates.

In other news tied to large-scale payments infrastructure deployments, the United Kingdom’s New Payment System Operator has invited industry stakeholders to populate specialist advisory groups that will have input on the development of retail payments infrastructure. Topics addressed will include clearing and settlement, rules and standards and migration away from existing infrastructure.

Payments, Cross-Border and Over the Phone

Individual company initiatives over the past week show that SoftBank, the Japan-based telecom carrier, has struck a partnership with Synchronoss and TBCASoft tied to a proof of concept for a new cross-carrier mobile payments service. That service is based on the Rich Communication Services global messaging standard and the TBCASoft cross-carrier blockchain platform. The companies have been working to build out a blockchain platform that allows for mobile payments across global communication carriers. Through the proof of concept, consumers can make purchases through their devices as they travel.

In other news, Remitly said earlier this week that it has expanded its digital remittance offerings into 11 new send countries that are located in Europe. In the past year, the company has expanded from three send companies to a total of 15 currently, and the covered territory represents $121 billion in annual remittance flows. Amid the new markets are Australia, Belgium, Denmark, Finland, Germany, Ireland, Italy, the Netherlands, Norway, Spain, Sweden and the United Kingdom. The company also noted that it has partnered with Stripe to process transactions that are done in different European currencies.

And as reported into the end of the week, Mastercard and Microsoft announced the debut of Mastercard Track, eyeing the cloud and a global directory to help streamline trade between firms by bringing them together across an online platform. In addressing the B2B space, where half of transactions are still paper-based, and where compliance and KYC risks abound, 150 million company registrations and records across thousands of data feeds can cut supplier onboarding times significantly down from the 16 days seen with current, manual processes, and also give greater visibility into payments flows.



New forms of alternative credit and point-of-sale (POS) lending options like ‘buy now, pay later’ (BNPL) leverage the growing influence of payments choice on customer loyalty. Nearly 60 percent of consumers say such digital options now influence where and how they shop—especially touchless payments and robust, well-crafted ecommerce checkouts—so, merchants have a clear mandate: understand what has changed and adjust accordingly. Join PYMNTS CEO Karen Webster together with PayPal’s Greg Lisiewski, BigCommerce’s Mark Rosales, and Adore Me’s Camille Kress as they spotlight key findings from the new PYMNTS-PayPal study, “How We Shop” and map out faster, better pathways to a stronger recovery.