February 21, 2024

For businesses, no matter their size, not all payment partners are created equal. Finding the right partner to manage payments can be the key to improving cash flow and simplifying the payment experience, as well as making cross-border payments a piece of cake.

In the PaymentsJournal podcast, rupert frenchProduct Owner for Fidelity Information Services (FIS), and Daniel Case, Javelin Strategy & Research’s Director of Business Services discusses what businesses can expect from a premium payments partner and how they can differentiate the best from the rest.

payment log

Cross-border trade is all about having the right payment partner

payment log Cross-border trade is all about having the right payment partner

Differentiation of payment partners

Businesses barely have enough time to manage the core functions of delivering products and services, so it makes sense to work with third parties to manage and optimize their payments. This is an opportunity to outsource a certain level of complexity to a third party and ensure that the payment process has as little friction as possible.

“Your payments partner should be focused on moving money and simplifying the payments experience,” French said. “And businesses transfer a lot of trust to their payment partners, and that must be respected. In most cases, we have the authority to manage a major source of revenue for many small, large and medium-sized businesses.”

Payment partners such as FIS can help process transaction data and cash liquidity in bank accounts. As French points out, both are key drivers of success or failure for businesses, especially small ones.

In particular, improved transaction data enables a high percentage of payment acceptance with lower risk.

Payment flexibility is a prerequisite for the gig economy

Gig workers often have to wait to get paid, sometimes even weeks after they finish their work. The ability to pay gig employees anytime, especially on weekends, is a key differentiator that small businesses should be looking for in a payment partner.

“The possible competitive advantage of being able to pay gig economy workers with money from an online business during off-days, and thus potentially competitive advantage, may be enough to help that business stay above the waterline,” French said. “Consider, for example, Friday night Competition for delivery drivers. If you can guarantee that you have cash in your bank account that you can pay the driver for delivery rights on Saturday morning or Sunday morning, that helps you keep that driver.”

Another important part is the accuracy of the data. “Being able to trust your payment partner not only to provide you with funds but also to provide you with the data – the data that you need to coordinate the activity service you requested or provide in the previous days – is absolutely critical ,” French said.

Cross-border payment optimization is the new standard

For small businesses that internationalize and use international gig work, moving money across borders at the lowest possible cost and as quickly as possible is critical.

But cross-border payments can be complicated and a headache to deal with.

Bank-run rail always has cut-off times, depending on the region you operate in,” French said. “There can be significant layers of regulatory control that can further complicate payment activity. What your acquirer should aspire to do is operate on the best domestic schedule when it comes to clearing card payments. “

Exploring new markets overseas can be a daunting task for many SMEs, and not just because of understanding the new market environment. Sorting out currency exchange and payment infrastructure can be complex, causing many businesses to shy away. But this can be improved with the right payment partners.

“SMEs can try exploratory moves abroad by leveraging the power of acquirers to enter markets that are otherwise extremely complex,” French said. “So, with a good payment partner, you can trial product sales in a market that you don’t want to be fully in, to attract real-world market demand. From there, you can get a better idea of ​​what you want to enter in that new market level of investment.”

All of these fall under the umbrella of value-added services, which Case said is important in differentiating payment providers.

“Many vendors can provide other different interfaces and so on,” Keyes said. “But when you add more value-added services, you can better meet the needs of merchants, and you can really stand out from other payment providers. These value-added services are increasingly necessary for the survival and success of businesses and merchants.

“As alternative payments become more popular, these value-added services become less of an added value (and) more of a need.”

Just figuring out the payment aspect can be a daunting task for cross-border businesses, French noted. This can distract business owners from the core aspects of their business.

“Removing the complexities of moving money across borders and the regulations that go with it, allowing our clients to really focus on what they care about is really a motivating factor in my own role,” French said.

Generally speaking, the range and breadth of services separates the haves from the have-nots among payment providers.

To achieve reach, businesses should look at where the provider has customers or partners and how those customers or partners align with the customers the business is interested in serving.

Depth refers to the depth of functionality provided by the provider. As mentioned earlier, this may involve cross-border payments. Another popular feature is the ability to advance funds based on forecasted receivables due the next morning.

Overall, the outlook is bright for companies looking to expand overseas. By finding the right provider, they can rely on payment expertise to get all the infrastructure ready to deploy when the company is ready to try new markets.