In a recent Volante survey, 50 per cent of small European businesses said they now make cross-border payments, and about 85 per cent across segments of all businesses, as globalisation continues to drive a higher volume of cross-border payments.
In the global survey, conducted in collaboration with Aite Novarica Group, Volante attributed the increased levels of cross-border payments over the last five to 10 years to expectations of a better payments experience; the significant revenue to be gained by providing cross-border capabilities, and the utilisation of the ISO 20022 messaging format.
Volante’s research shows that across the Atlantic, about 30 per cent of US small businesses have the need to make cross-border payments, and that number increases to about 60 per cent when looking across segments of all businesses.
The survey also highlighted that as the revenue potential from cross-border payments continues to rise, and the options available to make those payments evolve, banks need to be aware of the competitive landscape, available technology options, and how to provide a robust offering that captures the growing market of businesses that must make cross-border payments.
Volante added that next-generation cross-border solutions that minimise the inherent friction of the correspondent banking model are desired by businesses and their recipients.
It warns: “Not offering a more efficient way to make these payments will become increasingly detrimental for banks seeking to service these clients.”
Where technology enhancement is concerned, Volante has seen an increase in the number of vendors and technology solution providers utilising cloud-based payments-as-a-service offerings to help banks offer improved cross-border payments services to their business clients.
Volante says this is “levelling the playing field for banks that have historically been dependent only on their correspondent banking relationships to provide cross-border payments capabilities”.
In 2014, there were only 14 local real-time payment schemes and, currently, that number is just over 60, with 20 of those networks launching in the last 18 to 24 months.
Volante highlights that along with speed of payment settlement, these networks have “spawned innovation in improved data, transparency of payment status, accessibility, and connectivity”.
Volante attributes this progress to the increase of frictionless payments that have been primarily focused on the domestic payments space.
“It is now time for the industry to widen the focus to include cross-border payments”, it concludes.
