FINANCIAL SERVICES
Technology and cross-border innovation While streamlining this complicated space is no picnic , technology and innovators are working hard to solve the issues .
Ben Aier , VP Product ,
Yapily , points out that there are many dynamic operators in the current marketplace driving disruption . “ For me , the most exciting changes happening in this space today are at the intersection between embedded finance and open banking .”
Aier says that managing payments when doing business internationally “ presents a huge challenge for merchants ”. Very often , the endcustomer is charged with an international payment fee and receives non-competitive rates when paying an invoice in a different currency from their own . “ What ’ s more , lengthy settlement times are leaving merchants waiting for their money and the end-customer waiting for the delivery of their goods and services .”
She goes on to say that better understanding and implementation of cross-border payments within open banking and embedded finance are leading to streamlined cooperation between finserve providers .
“ Open banking payments enable the instant flow of cash from one bank account to another , bypassing card fees , lengthy settlement times , and risk of card fraud . International open banking payments currently use SWIFT to facilitate cross-border transactions .”
But , currently , this process is expensive and slow , and cross-border payment fintechs need banks and regulators across Europe to move faster to match demand for a cheaper international payments ’ alternative .
How open banking is easing the way While these challenges will take time to overcome , combined open banking and embedded finance solutions are enabling payment service providers and merchants to access an entire payments ecosystem through a single connection . Aier says : “ Using embedded finance , open banking platforms like Yapily can enable businesses to collect domestic payments , perform cheap foreign exchange interchange , initiate instant payouts and refunds , and streamline reconciliation .” Greater visibility over payment status , more control over the distribution and flow of funds , and reduced costs when it comes to accepting and transferring cross-border payments are just a few of the benefits , as these “ enable businesses to focus more resources on expanding globally whilst saving both time and money ”.
Crypto and borderless DeFi transactions Meanwhile , cryptocurrencies have risen within the cross-border space as payment methods that aren ’ t required to meet the strict regulatory requirements of fiat currencies . Transactions in crypto carried out on the blockchain currently enable buyers and sellers relative freedom from government interference , as well as personal privacy .
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