Borderless payments

What are borderless payments?

Borderless payments are transactions that take place between one country and another but are processed as if no border exists. Without a border, these transactions can side-step fees and restrictions, making them cheaper and faster. 
Whenever someone makes a purchase domestically, say from one pound sterling account to another, there’s a system that carries the money from the buyer’s account to the merchant’s account. With cross-border payments, that system becomes more complicated. 
That’s because cross-border or international transactions require a change of currency, foreign transaction fees, and dealing with an exchange rate. 
With borderless payments that mostly remove the need for fees, forex, etc., banks, card networks, and a group of varying domestic entities have to cooperate in order to transfer funds overseas smoothly.

What is the current state of borderless payments?

As mentioned above, the rise of borderless payment innovation is helping reduce the costs of sending money overseas by around 20% and providing a necessary bridge between merchants and consumers (sales) and between individuals and relatives (remittances). In fact, nearly two-thirds of consumers send cross-border payments to financially support loved ones abroad.

And the importance of borderless payments was fully displayed during the coronavirus pandemic. With global lockdowns in effect, having different ways of sending speedy, secure, and low-cost payments overseas were more necessary than ever.

One example of this was the problem of sending cross-border payments to recipients without a bank account. New borderless payment technologies have made it possible for individuals in cash-heavy societies like Nigeria and the Philippines to receive borderless payments through features like eWallets, virtual IBANs, and cash pick-ups. 

That said, there’s still a need for more card networks, local payment providers, and digital technologies to expand their reach and customer base in new countries. Recent innovations like virtual accounts and mobile wallets have even made real-time transactions possible compared to several days in the past.

Effective borderless or cross-border payments often begin with suitable payment localisation options. Localisation is when merchants make their international customers’ preferred payment methods available. So if a merchant in the UK sells a certain product to customers in China, then offering them the option of paying by Alipay is a great example of localisation. 

While a convenient feature, it requires the merchant to integrate multiple payment platforms to support localisation. Payment service providers would need to support local payment gateways, offering multiple languages, exchange rates, etc. Nowadays, merchants looking beyond places like China for a more global consumer base might need to offer multiple localisation options.

Why multicurrency acceptance is needed for eBusiness?

Multicurrency acceptance is a payment processor or gateway’s ability to support various payment options in foreign currencies. In the modern age of cross-border commerce, most business owners want the option of receiving and making payments, settlements, payouts, and more, in the currencies of their choice.

A great example of multicurrency acceptance is multicurrency bank accounts. With a multicurrency business account, the account holder can pay and receive money in different currencies without the need for foreign exchange, including conversion fees and exchange rates. But what happens when you want to know the combined value of your multicurrency account? To fulfill this function, you’ll need the multicurrency reconciliation feature.

Tailored solutions can positively impact your sales as customers are more likely to buy from your eCommerce store again and again when you allow them to pay in their local currencies and with their preferred payment methods. In fact, multicurrency-based features should be an essential part of any cross-border marketing strategy. The alternative is that your businesses may end up with abandoned carts and lost sales.

Start enjoying quick, friction-free, cross-border payment solutions today.