5 Innovations to Watch in Cross-Border Payments

The year is off to a dynamic start in the cross-border payments industry, leading many to ask: What’s ahead for the next 9 months? Innovations are being shaped by the exponential adoption of the Internet, changing business models powered by technology and user demands of speed and ease. Here are five innovations driven by these trends in 2016.

1) Beyond payment acceptance: Focus shifts to payouts and settlements

In the payments industry, 2015 was the year of payments acceptance; addressing EMV requirements, mobile payments and contactless technology were the focuses of businesses around the world. However as businesses look to streamline operations, manage regulations and reduce costs, 2016 will bring more focus on cross-border payment settlement and strategies for paying international recipients.

2) Embedded user experiences arrives for mass payout solutions

As mass payouts are being conducted more frequently and more globally, the next wave of fintech is helping to shift businesses away from manual and batch payout processing to an embedded user experience. The benefit is minimal data entry requirements, as an embedded experience enables sending businesses to store recipient data and recall past payment details on demand. Payout solutions like Transpay for example, provides businesses with a single-point API connection to a global network for real-time payouts, without the need to leave their interface.

3) Marketplaces drive cross-border payment innovation

Of the businesses driving cross-border innovation, marketplaces stand a cut above.  As the online marketplace business model are disrupting e-commerce, professional services and employment industries, these crowd platforms will help to reduce the income gap between developed and still developing world.  The need to conduct high volume global transactions is central to their success and top marketplaces are tasked with offering end users with payout options that are cost-effective, secure and universally available.

4) Emerging markets take center stage 

Emerging markets are a thriving payout opportunity. For example, freelancer platforms are seeing some of their highest payout volumes being sent to emerging countries like India, Bangladesh and Philippines. Understanding this opportunity, in-country banks are priming themselves to handle these higher payout volumes and partnering with global networks to speed up a once antiquated, timely process. Upgrades in banking infrastructure will be revolutionary in the coming months and these alternate banking solutions are making instant cross-transfers a reality. This feature has important B2B implications as this translates into clients seeing money in their bank accounts on that same day which can be a huge differentiator.

5) Alternate payment solutions capitalize on cross-border opportunity

Until recently, there have been only a few players in the market able to take cross-border payments and provide a true global solution. This is largely due to limited ability to operate in this highly regulated environment, which lead to solution providers “riding the rails” of other networks in order to fulfill payouts. Now, solutions that provide an end-to-end alternative to SWIFT are disrupting antiquated strategies. As the cross-border payouts industry continues to mature, solutions that are reducing associated costs and managing FX will set themselves apart.