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How To Streamline B2B Cross-border Payment Process for SMEs

SMEs, specially from the tourism and import & export industry need to optimize their B2B cross-border payments process to be more profitable. Learn how.

Cross-border payments are expanding at an incredible rate. To enable flawless transactions between businesses in different countries, divided by currency, a localised payment experience is essential. To strengthen their payment architecture and streamline their cross-border payment solutions, SMEs must learn to navigate payments with new innovations.

Small and medium-sized enterprises should be aware of a number of factors when making cross-border payments to vendors or customers in other countries. It is critical that small and medium-sized businesses understand the best practices to make and accept payments from customers who are based abroad as profitability, customer retention and growth may depend on it.


The below mentioned cross-border payment solutions on a strategic and business processes level, can assist you tweak your company's cross-border remittance process and thrive in today's economy.

Traditional Advances driving change Today
Exclusively Bank led
  • Consumer needs and competition
  • Technological advancements
  • Digitization
  • Favourable changes in regulations
  • Technology companies
  • Cross-border payment service providers
  • Fintech firms
  • Standard services
  • Product based
  • Costly & complex
  • Unsecure at times
  • Tailored solutions
  • Industry and business specific services
  • Customer-based solutions
B2B cross-border payments industry is changing for the better




Focus on your clients' preferred regional payment platforms

Different countries prefer to send and receive global payments via different platforms. Consider this when accepting and making global transactions to ensure smooth trade and as part of your international trade strategy. Many businesses now provide local payment methods for international transactions, but many SMEs are unaware of this option or do not understand how it can help them overcome the obstacles of cross-border payments. For example, a company that only accepts one type of payment method for domestic and international transactions may experience transaction delays or failures if the recipient does not accept the provided payment method. Furthermore, SMEs that offer their customers local payment options are better positioned than their competitors to meet the needs of cross-border customers. This is because customers prefer to use service providers, they are familiar with.

If you do business with companies in just one foreign location, it is best to ask and know their preferred means of cross-border payments.

For example, Worldpay is UK’s topmost payment service provider. Earthport is another.

3G Direct Pay, based in Kenya and Tanzania, specialises in online and mobile payments in six East African countries.

HyperPay, which was founded in 2010, has become the Middle East and North Africa (MENA) region's fastest-growing online payment service provider.

Ingenico, headquartered in Paris, operates in every region of the world, including EMEA.

MEPS, PayFort, Network International operate in the Middle East and African continent.

The larger player in the USA and Canada is Paypal.

AsiaPay, based in Hong Kong, offers professional payment consulting as well as local payment services in 12 Asian countries, including China, India, Indonesia, Singapore, Taiwan, Thailand, and Vietnam.

Tenpay is a direct competitor to Alipay, which is China’s most popular payments service provider. While Alipay is part of China’s Alibaba Group, Tenpay was launched by Chinese Internet service giant Tencent.

If you have numerous international customers in one location, you should centralize your international payments to a single payment processor. It automatically adapts to local buyer/seller requirements, simplifying the payment process and also streamlining the payment process.




Have a well-defined approach to currency dealings

When you trade internationally, you will be transacting in a lot of foreign currencies, which may involve currency conversion costs. When buyers view the product/service, they want to see the prices in the local currency. Let's say you list prices in limited currencies or in a single currency, such as US dollars. In this case, it is very likely that they will not continue to buy, especially if you are a B2C seller. This makes it ideal for listing in the local currency of the region you're selling in or allowing buyers to choose their preferred currency.

Even if you are in the B2B space and want to simplify the payment process for buyers and allow them to settle in their local currency, a good way to limit your risk is with Forex forward contracts. This is because the local currency received may be lower depending on the foreign currency if the buyer has to pay USD per month. A forward foreign exchange contract fixes an exchange rate at an agreed price for future purchases or sales within a specified period of time.

For example, if you run a business in the EU and are doing business with a client in Japan. And are charging them 2000 Yen per product unit sold. That 2000 Yen may be worth a different amount of your local currency at specific periods in time.

This poses a foreign exchange risk because you may earn fewer Euros per sale as time passes.

A forex forward contract allows you to pay a fixed number of Yen for a fixed amount of Euros at a future date. This reduces risk because you'll know exactly how many Euros each Yen is worth.


Maintain cross-border payments compliance

If you conduct business in multiple parts of the globe, you must be familiar with the rules and regulations of each country, including payment processing laws, tax laws, and data privacy laws.

When conducting international business, you must follow the laws of both your home country and the country with which you do business. This means that determining the laws that govern cross-border payment processes requires twice as much effort. Data is essential in international trade. The new European General Data Protection Regulation (GDPR), for example, imposes strict rules on what is and is not permitted for customer data. It also defines the rights you grant to customers in relation to their data.

Money laundering is a persistent issue, and many countries have strict financial disclosure laws that must be followed or face fines or criminal charges. Being a global company necessitates extra time and effort to ensure compliance with all laws and regulations.

ISO 20022 is a messaging standard that establishes a global language for payment data, allowing for better reconciliation and faster processing. In March 2023, SWIFT will introduce ISO 20022 for Financial Institutions for cross-border payments and reporting (CBPR+). Although compliance to the ISO 20022 standard is not required by law, but those who do not act now and adopt such security standards risk exclusion from international payment systems.

The Cross-border Payments and Reporting Plus (CBPR+) specification stipulates how ISO 20022 should be used on the SWIFT network for cash reporting and cross-border payments. The SWIFT message service will validate conformance to the CBPR+ specification, so users must implement the requirements properly.



Reduce the cost of cross-border transactions

A major barrier to international trade is the high transaction costs associated with each transaction, which are particularly burdensome for SMEs. Costly and time-consuming payments involve the banks that handle most international transactions. Then there are the required intermediaries of the transaction process that eat into the value-chain. Tailor-made cross-border payment solutions, like those offered by Fable Fintech are on the rise thanks to advancement in all forms of remittance technologies.

Fable Fintech’s B2B cross-border payments solutions for SMEs, banks, other financial institutions and large-scale companies are flexible enough to be built to client requirements and at the same time are cost-effective, fast, secure and interoperable. These configurable payment platforms can help you partner with your client’s preferred intermediaries. The SaaS-enabled platforms have worked with more than 40 clients, including banks, money services businesses, non-banking financial services firms, money transfer operators, and business corporates that offer payments services. Configurability is built into the technology platform, which has supported over 8 million transactions.

To know more about the configurable cross-border payment solutions Fable Fintech offers, read The Platform Model.



Understand SWIFT, CHIPS and know the alternatives

CHIPS and SWIFT are two payment codes used around the world.

They are extremely crucial in high-volume, high-value B2B transactions.

When it comes to identifying the sender and receiver of a cross-border transaction, SWIFT and CHIPS accomplish nearly the same objective. SWIFT codes are created and maintained by the Society for Worldwide Interbank Financial Telecommunication (SWIFT). SWIFT links about 11,000 financial institutions worldwide. They identify the bank and residence country of the person or business receiving an international payment. These are linked to that person's or company's bank account number and ensure that cross-border payments are routed properly.

CHIPS codes are used to identify the sender of the money, as when conducting business with people from different countries and languages, information about the receiver and sender can be lost in the process.

SWIFT and CHIPS codes are used for risk mitigation.

With the current global political situation, many countries are concerned about being cut out of these US based institutions like SWIFT and CHIPS and being unable to transact with their global commerce partners. This has led them to develop their own alternate cross-border payment facilitation systems like Russia’s SPFS (System for the Transfer of Financial Messages), and China is working on further developing CIPS (Cross Border Interbank Payment System) which facilitates Renminbi. CIPS has about 1280 participants, mostly in Asia. Euronet Worldwide, an American company has launched Dandelion, which according to them is a more efficient and cost-effective payment method that transfers funds directly to the recipient's account via integration with local real-time payment networks. In India too, the National Payments Corporation of India (NPCI) is planning to globalize their UPI system by catering to the Non-Resident Indians (NRIs).

Global trade is at the heart of world economy so it is unlikely that any drastic measures will be taken to keep countries out of the system, however it is good to have alternatives to keep your business going.



Choose a cross-border payments platform based on requirements & configurability

Understanding the value on offer is an important part of selecting the best cross-border payment platform for a small and medium enterprises. B2B cross-border payment platforms may include the following features:




Invoicing and payment processes are integrated with counterparties to eliminate the need for reconciliation   Assistance in promoting the company to target market within the system and processing payments in volume



Loyalty and Rewards

Accounting, reconciliation, and reporting applications that help businesses record payment activity in their accounting systems   Reward points, airline miles, offers, coupons, promotions, merchant funded rewards (MFR), and other items delivered to the payer
Desired B2B cross-border payment platform features for SMEs


A number of banks with established customer bases and fintech businesses with flexible offerings and go-to-market strategies are currently transforming the cross-border payments system. This is a golden opportunity for SMEs to capture global market share. Contact the fintech experts today if you are a Tour Operator, Destination Management Company, or Imports & Exports business looking for more information on the best cross-border payment solutions for your company's revenue growth. Get in touch with a cross-border payment solutions team now!





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