Cross border payment solutions to implement for international expansion for your Small Medium Enterprises (SME's).
Globalization has massively changed the world's economy. While the initial phase of transformation was mainly pushed by big corporations with the resources and chain of production to extend their business across the world, the second phase of economic sustainability will be driven by the increasing importance of SMEs' world commerce. Today, SME cross-border remittance represents a substantial percentage of the global B2B payments market, which equals more than $10 trillion every year.
Cross-Border Payment Solutions for SME's
Today SME's have the best opportunities to venture into fresh markets owing to the recent developments in remittance and the swift development of global commerce. According to a World Bank report, peer-to-peer cross-border payments accounted for over $700 billion back in 2019. Even so, cross-border transfers still remain among the most troublesome consumer transactions filled with ill-timed payments, massively outrageous fees, and a worrisome absence of clarity.
1. Localizing payments to reach more clients
About 88 percent of merchants believe global sales are vital to their protracted sustainability. However, only 35 percent of e-commerce chiefs believe they are entirely equipped to handle cross-border transactions. To expand to fresh markets, businesspeople have an obligation to make localization a component of their global expansion game plan. This involves providing international clients and business partners with the capacity to pay or get paid using their favored domestic payment means.
For instance, global credit cards are not the most used payment means used in several countries. In India, citizens now prefer using local payment methods like UPI's. In Thailand, only a few people pay using credit cards to pay for goods and services online. Having such market specifics, it is vital to incorporate a payment means customized for each country to increase market reach if you are looking to expand your business internationally.
With a massive yearly growth rate, international commerce provides many businesses with a chance to grow globally. However, expanding to the global scene has its own fair share of challenges. And one of the significant problems is online payments. Local payment habits vary greatly from one nation to another, and it important for businesses to understand this.It will help them when budgeting and setting percentages when making sales to break even.
2. Reduction of transaction fees to encourage more trade
Cross-border trade attracts a couple of transaction fees like cross-border fees. These are evaluation fees paid by a trader when a customer does a transaction using an international bank card. Cross border fees depend on card membership; and leading payment services charge a heavy transaction fee in exchange for accessing their global services.
Cross border fees are part of foreign transaction fees. International currency fees are not only charged based on the physical location but on where your bank operates or where your business is registered. If you are in the US, for example, and want to trade with a country in Singapore, to avoid cross-border fees, the only option remains is for you to register a company in Singapore.
Transfer fees are charged when a customer transfers money from their account to an international trader's account. In most cases, these fees are high compared to local fees. It makes it hard for a small-time customer to pay transfer fees and manage to break even. A customer looking to purchase goods from China will attract transfer fees that vary from the location the customer's bank account is situated. Each country has different rates of transfer fees.
Currency Exchange fees are the most common international fees. They depend on each different currency and also the specific exchange bureau you trade with. Most forex exchange bureaus charge extra fees to break even, and banks charge the highest currency exchange fees.
For a better solution for SME's to cater to international markets without establishing an entity in a different country and incur low overhead charges, XanPay presents an innovative solution. Businesses can engage in international expansion without having to worry about paying a high cross-border transfer fee. Moreover, SME's can offer options for local payment methods to their consumers in Japan, Korea, Thailand, Singapore, India, Malaysia, and many more.
3. Embracing digital trade to make International transactions swift.
With advanced technologies, it is now easy for SMEs to close the economic gap between developed and developing countries through digital trade. This is apparent in that digital trade promotes trade between entities that are in different geographical locations. It is also fast because it takes a shorter period for money to reflect on a merchants' bank account than traditional deposit methods. For instance, you can conduct near instant transactions using the services of XanPay.
Advanced digital trade can ensure that transactions are instant, saving the parties time before using it to wait until the transfer clears. Digital Trade ensures that customers have access to cross-border payments while protecting the free flow of data. It also adopts and promotes open banking guidelines that encourage competition.
Governments can foster trust and security of digital trade by their citizens. This will make it easy for customers to share their 3rd party private information and encourages trust in the global payment system. Governments can also ensure that there is an increase in fraud awareness and cybersecurity.
Coordinating Fintech's oversights that offer cross-border services can also ensure smooth entry, expansion, and operation. Fintechs from vetted regulators markets can then be able to provide cross-border services seamlessly in other partner markets.
Improved and efficient cross-border transactions can make international trade easy and swift. Cross-border payments can ensure that there is growth in global trade. It can make it easy for a person or a business to purchase a product from another geographical area and deliver it to wherever you choose. It will also make it easy to attract more clients and ensure increased international trade.