International travelers have always had to deal with the issue of transacting in new places. Historically, it meant currency exchange or traveler’s cheques, both which added friction to payments and travel preparations overall. Digital payments have made cross-border payments easier, but most solutions still come with challenges. They’re more expensive than local transactions, slower, and lack visibility. Additionally, they aren’t available everywhere and funding merchant accounts can be delayed.
In addition to internation travel, e-commerce growth is driving the need for a solution to cross-border payment challenges. Juniper Research predicts that 33% of e-commerce spending will be cross-border by 2028, outpacing domestic growth by 107% to 48%. Juniper’s research also found that social media marketing is impacting cross-border payments. Direct-to-consumer companies are gaining market share but require a way to accept payments from global consumers who are ready to click “buy now.”
Fintechs Offer Cross-Border Payment Solutions
Fortunately, Fintech solution providers are successfully taking up the challenge of making cross-border payments more user-friendly. A great example is PagBrasil’s Pix. An instant payment solution developed by the Central Bank of Brazil, it allows consumers to scan QR codes or copy a code into their digital wallet apps to make a contactless payment.
Consumers and merchants benefit in several ways from using a Fintech app for cross-border payments. First, it’s available 24/7. There’s no need to limit transactions only to specific times or to work around weekends or holidays. Additionally, consumers don’t need a local bank account to use a Fintech app—they can make a payment with a digital wallet or other solution that partners with the Fintech company. Merchants also have the advantage of lower transaction fees than cross-border payments and access to their funds in near-real time.
Building Cross-Border Payments into Retail Strategies
As retailers, restaurateurs, and other merchants expand to new digital channels and encounter in-store customers who have traveled from other countries, it’s necessary to use solutions that enable fast, efficient, secure cross-border payment transactions. However, an extra integration with merchants’ point of sale (POS) environments means more development time and a bigger maintenance burden to keep functionality optimized.
A better way forward is working with a payment technology platform provider that has built an extensive network of Fintech partners. Fintech partners make their solutions available to all acquirers who integrate with the platform—with a single integration—to give merchants the option to accept these payments. At the checkout, consumers scan a QR code at the payment terminal, complete the payment with their payment app, and the app communicates to merchants that funds will be in their accounts within an instant. In addition, a local QSR or movie theater can allow a consumer to order and pay online, giving the merchant instant confirmation and enhancing customer experiences.
Using Fintech apps to solve cross-border payment challenges also underscores the need for merchants to accept contactless payments. Fintech apps that integrate with digital wallets allow consumers to tap or wave their smartphones near a card reader to complete transactions. A near-field communication (NFC)-enabled payment terminal optimized for use in the retail application—from the countertop to curbside or anywhere customers engage—allows merchants to meet the growing demand, estimated at a whopping 19.1% compound annual growth rate (CAGR), for contactless payment methods.
Where to Learn More
Whether you’re a POS and payment solutions provider, acquirer, or merchant seeing a greater demand for a better cross-border payment solution, Ingenico is ready to provide you with the information and options you need. Contact us to discuss challenges with cross-border payments and let us show you how to overcome them.
