Leaving the world of wire transfer: payment solutions in 2019 and beyond
Most organizations today rely on some element of international trade. One of the advantages of the internet age is that a company can reach customers on the other side of the world as painlessly as ones in the same city. Problems that significantly hampered companies only a few decades ago like language differences and monetary exchanges are at least partially solved by browser plug-ins that translate on the fly, and services which help move money from one currency to another.
For small businesses or those organizations that only do the occasional international deal, the overheads of issues like local and remote taxes, customs & excise, and exchange rates come rarely enough for each case to be given any special attention it may require. But when at scale, trading goods or services internationally gets significantly more complex, or expensive, or both.
While the internet has its democratic effects in that it can smooth out the divisions between nation states and the businesses & citizens in them, it has also leveled out markets so the customer or service-user has choices online. If, to use service X, a company or consumer can use services or systems with which they are familiar, quickly, easily and safely, then that will be their favored option. And while service Z might be better suited and even cheaper, if it can only be accessed by jumping over various virtual hurdles, like signing up for an unknown payment system (plus confirming identity, email address, financial details), then it will rarely be chosen.
There are plenty of institutions out there that claim to be able to help with the processes involved with trading at scale. “Traditional” banks have platforms to help international payments pass through the complexities of foreign currency exchange, tax jurisdictions, and reconciliation. But that type of transaction management isn’t really those organizations’ core business – and it shows. High services charges, a frankly 19th-century adherence to local office hours and an inexplicable insistence on making parties wait for several “working days” while funds clear make using their services at scale inconvenient and expensive.
Wire transfer services, banks, and many much more modern payment gateways have also not been particularly quick to adapt to some of the payment trends that are favored by people & companies trading online. Recurring payments, subscriptions, leasing, and even more traditional deposit-plus-balance transactions are often difficult to set up and maintain. Newer services that can handle this type of setup do exist, of course, but often levy fees that stack up, in addition to others accrued throughout the process, like credit card surcharge, exchange rate penalties, or local taxes.
Working through these complications is made easy if we consider a few foundational principles required to simplify digital monetary transactions.
Whenever money changes hands, establishing trust is a prerequisite. That means offering methods of exchange that are familiar to both parties: a Chinese company may not be willing to use PayPal at scale, having an existing relationship with Baidu Wallet or Alipay instead. Transparency, accountability, and familiarity all count for much, so next-generation payment systems need at their heart to be flexible. If a locale with which trade links need to be forged swears by JD Pay, or Yandex Money, or even likes cash on delivery, then the payment system should be able to adapt.
Here at Tech HQ, we’re considering three payment service providers that offer the type of framework for exchange that we consider to be suitable for trade in 2019. While none of those featured below may be ideal for every instance, there are elements in each that we hope will address the needs of your company or organization.
Flywire’s payment platform is immediately familiar to its end-users as it’s multilingual and able to offer payment methods which are locally known and presented in the local tender – the company operates in 240 countries so caters for 150 separate currencies. Complex transactions are frictionless and help build trust for both parties that’s reinforced throughout the process: there are no unexpected price hikes nor mystery costs added in later steps.
The platform itself helps drive return business, as it actively seeks out the optimum exchange rates for international payments and the lowest possible banking or financial fees. From e-commerce sites for omnichannel retail to the payment & reconciliation systems used by complex institutions, Flywire has processed $12 billion to date for its 1,600 clients in education, travel, and healthcare, to name but three.
Complex spread payments, refunds, and payment models like monthly recurring charges, deposit & balance set-ups are all right there; everything needed for fast and accurate reconciliations. The ethos of total transparency runs through the platform, with every step in the receiving and sending of currencies verifiable through a portal that gives real-time information in detail, down to an individual transaction’s progress.
The platform massively expands the commerce possibilities available to business strategically, is more than capable of integrating with existing finance IT, and is as automated as you need it. Multilingual customer service staff, drawn from over 400 employees (“Flymates”) in 13 offices across the globe are available 24/7 for enterprise users and end-users alike.
Read more about the Flywire trusted platform here.
Irish brothers Patrick and John Collinson are two of the world’s youngest self-made billionaires, having founded Stripe in their twenties, and grown the business at an unprecedented and often-imitated rate. Investors include CapitalG, Elon Musk, and General Catalyst Partners, among others, and the Stripe platform has attracted startups and established products alike to the fold. Their customers include Skype, Act Blue, Missguided, Made, and Dice.fm, and Stripe now has 25 offices across the world.
In addition to payment solutions, Stripe Atlas makes most aspects of starting a new internet business easier, including company incorporation and basic banking; plus there’s a range of courses on tap for the budding entrepreneur.
Stripe offer SDKs for Android and iOS in addition to its web portal options, enabling companies launching apps to make seamless use of payment facilities, which include one-off payments and subscriptions. The company’s Radar uses what the company describes as machine learning algorithms to help protect from fraud, and allows customers to review flagged payments.
For subscription-based billing, Stripe offers metered billing, per-seat pricing models, various add-ons and options for quick customer conversions, and allows multiple subscriptions per customer.
Stripe is, of course, fully PCI-compliant, and can protect payment details taken in 140 currencies (plus a few cryptocurrencies), ensuring that e-commerce is a fully global marketplace for its clients.
At the turn of the millennium, the National Data Corporation renamed itself Global Payments Inc. It already had a significant stake in payment processing systems, having been established in 1967 and going on to process half of US banks’ MasterCharge payments by 1977. Today the company employs around 11,000 people in 32 countries, processing 17 billion transactions annually for over 2.5 million businesses right across the globe.
That pedigree and depth of experience mean that Global Payments has developed an extensive range of partners and abilities (some by acquisition and merger), so can, for instance, accept as mediums of exchange of 140 payment methods, from Apple Pay, WeChat Pay, and Amex to QIWI and UnionPay.
There’s a hosted payment service by which organizations can embed the Global Payments portal in their own online platforms (iFrame, redirect or Lightbox) and the PCI DSS compliance, plus local governance requirements are handled by the Global Payments, not its service-users.
For its customers that want sophisticated options that combine regular stipend movement or just the occasional one-off payment of virtually any size, the Global Payments platform can fit all but the most esoteric requirements.
*Some of the companies featured are commercial partners of TechHQ
2 December 2022
1 December 2022