Cross Border Payments

Background:
Making payments to a beneficiary in a different country and often in a different currency can be daunting. Businesses want to ensure that the counterparty will be paid the correct amount, that the cost is reasonable, and the payment will arrive timeously. The same can be said for receiving payments from other countries/ in different currencies. Reconciling the transaction as received in the Bank Account is often not possible to automate, due to the different amounts/ charges etc deducted from the original amount send by the counterparty. Understanding the cost of making/ receiving cross border transactions can be difficult.

Why is this important to businesses and corporates?
• FX costs for outgoing (and incoming payments) can be surprisingly high for a Business. Whilst there are now a greater range of options to send money/ receive funds from overseas, it can be complex to navigate the options in terms of costs, FX pairs, country reach.
• Manual reconciliation is a cost to a business, the more clarity and detail in a receipt, the higher chance there is to automate the receipt. This can also help reduce account receivables with earlier release of the reconciled payment.

Questions a business need to consider include:
• Do they know the costs being incurred in paying/ receiving in other currencies?
• Is it better to pay in invoice currency at transaction date, or fix the FX rate before payment?
• What is the best payment type to use for small amounts? And for Treasury payments?
• Are new Fintech offerings suitable to be used for payments and receipts?
• How efficient are they in processing foreign current receipts?
• What currencies are offered for the settlement of invoices?