5 Benefits of a Cross-border Payments System
Many of our payment methods here in the Philippines are simply outdated. We still rely on cheques to pay for a lot of things, mortgages for example. Where in most of our neighboring countries have adapted to cashless, mobile and crypto payments. Look at how PayPal disrupted the e-commerce scene, and basically changed the world, by providing us with an online payments system.
Ok, so? Think.
Imagine this, if you’re an up and coming entrepreneur trying to scale the next billion dollar startup, you have your product, you know how to distribute it but then, how can you efficiently and cost-effectively receive payments for your products or services? Money that will then fuel your company’s upward expansion.
Here are 5 Benefits of a Cross-border Payments System:
- Easily receive payments from everyone
“Within five years, half of today’s smartphone users will be using their phones and mobile wallets as their preferred method for payments.”
Peter Olynick, Senior Practice Lead, NTT DATA Consulting, Inc.
It’s probably one of the most obvious reasons. If you have a robust, secure and truly complete payment system, your customer reach due to payments alone will be worldwide. If you’re able to process credit and debit card payments from all carriers, link to multiple nationwide clearing houses and be able to process crypto’s, then you’ve successfully globalized your payment reach.
2. Faster Transactions
With the emergence of mobile payments and crypto currencies, payment processing speeds and security have drastically increased. Instead of waiting for days before your checks to clear, payments nowadays only take minutes.
The inflow and outflow of money are faster than ever, and payment channels have long veered from traditional banking methods. A simple look at China’s emergence of mobile payments will leave you astounded by the sheer increase in its usage and volume.
3. Less Payment Issues
Have you tried using, let’s say, a US issued credit card and swiped it on a PH terminal? Chances are, your payments will be declined. You would then have to call your issuing bank and tell them you’re using your card on such and such. It’s a long arduous process of verification that you simply have to go through.
So, why is that?
The Philippines is ranked in the top quarter of Kaspersky’s list of countries most prone to cyber attacks. We are simply more dangerous than others and financial institutions are taking extra steps for obvious security reasons.
Having a globalized network of banks and financial institutions at the back bone of your payment processing will eliminate such problems with ease. Multiple payment channels will be accepted. Though there are chances that payments will still be screened and declined, this is not because of using a local gateway, that’s for certain.
4. More Payment Options
We know for a fact that not many financial institutions in our country, banks included, can process all credit cards. Some may have Visa, MasterCard and JCB, some may have Amex, others may have Diner’s and Discover. And we’re just talking about credit and debit card processing, just 1 of the many payment options you can offer your potential globalized customers.
What if you can also process payments beyond the usual credit card gateways? Connect to every clearing house there is and virtually do bank to bank payment transfers with almost every bank in the world. Why stop there? you can even go beyond banking and accept Bitcoin payments?
All of which are definitely possible and are available in most developed countries, and I personally don’t see any reason why we shouldn’t follow.
5. Convenience
Many of our OFW’s (Overseas Filipino Workers) can relate to this; If you’re working abroad, Dubai perhaps, and wanted to purchase a condo unit back home. You usually have to do 1 of 2 things:
a. Go back home, set-up a checking account and issue dozens of post dated checks. Of course, put some money in it and find a way to fund it month-on-month while you’re away. Key note: YOU have to find a way to fund it while you’re thousands of miles away, not your broker, not the bank, YOU.
The next one requires a LOT of trust. Seriously.
b. You go back home, pay for your ‘Reservation fee’ via a local bank wire or cash payment and you send money to a trusted individual via remittance channels, Western Union let’s say, to go to your property developer every single month and personally remit the payment for your monthly amortization. If your ‘trusted individual’ decides to keep the money without you knowing, you’d continue to send him money for the next x number of years! (this actually happens a whole lot)
What if you can just open your laptop, grab your smart phone or tablet, go to an app or website and pay using whatever credit or debit card you have in your wallet? Doesn’t that make life a lot more simple? I mean, you already have a lot to think about, paying for your condo shouldn’t be a pain in the behind.
Here’s the deal.
Surely, having a payment system that fulfills all your business’ needs is a must have. It helps you cross geo’s and keeps the income flowing minus the hassle, steep costs and bureaucracy of traditional payment methods we currently have. I mean, wouldn’t you want your product to reach the other side of the world and tap customers you didn’t even know existed?
Tell us what you think!
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