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  • Epico Finance

How To Save On B2B Cross-Border Payments?

Updated: May 19

Today global market requires businesses to engage in cross-border trade and these are based on international money transfers that often can get really expensive. This is where financial technology, or fintech, companies are making a significant impact, offering cheaper and more efficient solutions for B2B cross-border payments.



b2b-cross-border-payments

 

Why Fintech's Have An Edge In B2B Cross-Border Payments Space?

 

Fintech companies are transforming the traditional financial sector, by using and adapting new financial technologies and bulding global correspondent banking networks to facilitate global payments. What allows them to significantly reduce the costs and time involved in cross-border payments is that they develop a network of banks, both global and local, that give them an economies of scale both for pricing and ability to settle payments.

 


Having Competitive Exchange Rates

 

One of the primary advantages of using fintech for international transactions is access to competitive exchange rates. Unlike traditional banks, which often add a substantial markup on the official exchange rate, fintech companies offer rates closer to the market value. This can result in considerable savings, especially on large transactions.

 

FinTech’s are able to achieve better exchange rates by aggregating large amounts of FX from all clients and then getting more favorable rates from their liquidity providers. Moreover, FinTech’s aim to onboard as many as possible clients and often compromise on pricing, unlike traditional banks.

 


Also Lower Transaction Fees

 

Fintech companies typically charge lower fees than traditional banks. By operating online and optimizing their processes, they are able to minimize operational costs and pass these savings on to their customers. Some fintech platforms even offer fee structures that become more favorable as transaction volumes increase, making them an ideal option for businesses with high payment volumes.

 

However, pricing often depends on the industry that client is operating in. If it is a high risk business, fees might be higher than traditional bank. On the other hand, traditional banks usually do not open accounts for high risk businesses.

 


Faster Processing Times Too

 

Time is a critical factor in business transactions. Traditional bank transfers can take several days to process, especially when dealing with different time zones and banking systems. Fintech solutions, on the other hand, can often complete transactions within a matter of hours. This speed can be a significant advantage in business operations, helping companies to manage their cash flow more effectively and fulfill their financial obligations more promptly.

 

Fintechs often have faster transaction processing times because they are constantly developing their banking partnerships with global and local banks, allowing them to leverage their local payment rails, such as SEPA instant, or Faster Payments and so on.

 


How About Security And Compliance?

 

Despite the benefits, the security of cross-border payments is a concern. Fintech companies employ advanced encryption technologies and adhere to strict compliance standards to protect against frauds. When choosing a fintech provider, it's essential to assess their security protocols and regulatory compliance to ensure they meet the highest industry standards.

 


How To Make The Right Choice?

 

Selecting the right fintech provider requires market reasearch. Here are some factors to evaluate:

 

- Security: Ensure the provider uses robust encryption and has a strong track record of safeguarding customer data.

- Regulatory Compliance: Verify that the fintech is licensed and compliant with the regulatory frameworks in all relevant jurisdictions.

- Exchange Rates and Fees: Compare rates and fees across providers to find the most cost-effective solution.

- Speed of Transactions: Consider the average processing times and whether the provider can meet your business's needs.

- Customer Support: Good customer service can be invaluable, especially in resolving any issues that may arise during transactions.

 

If you would like to get an up to date list of low cost fintech’s in your region, fill out our contact form and we will send it to you by email.

 


Conclusion

 

The advent of fintech has brought about a seismic shift in how businesses handle cross-border payments. With the potential for lower costs, faster processing times, and enhanced security, fintech companies are becoming the preferred choice for many businesses around the world.

 

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