Far from turning back the tide of globalization, as some predicted, the global pandemic has opened business leaders’ eyes to the potential of internationalization. In fact, Nium’s international expansion plan and payment strategy survey found that 83% of businesses are planning on expanding their business operations or reaching into a new, international market in 2022.
Business and customer networks, supply chains, and the workforce can now expand beyond geographical borders, enabling companies to operate and compete on a global scale. Consequently, many businesses have invested in systems to power internationalization such as cloud ERP, CRM, TMS, HRIS, and others. However, there is one notable exception: payments.
In today’s digital economy, effectively moving money to employees, customers, and suppliers is now a key capability. This article explores what’s holding businesses back and how leaders can adopt modern money movement to scale and succeed.
The Payment Problem
When it comes to moving money, most businesses today still rely on patchwork legacy communications networks between banks. These not only involve cumbersome manual work, but the pain points extend to limited visibility, control, or value.
According to a 2021 survey focused on 300 U.S. finance decision-makers, 84% of companies faced payment operations problems such as delays, a high rate of payment failures, returns and refunds, and data quality errors. For businesses looking to expand, these risks limit growth and drive-up costs- a clear bottleneck needing resolution.
The primary reason for this is the fragmented nature of payments themselves. When it comes to cross-border money movement, every country has different compliance rules, infrastructure, and licensing. This means each business must demonstrate compliance and accountability within these rules in each territory to be allowed to operate and move money.
Most payment providers, therefore, have to connect to a complex chain of back-end networks to offer the appearance of a global solution to customers.
There are signs that leaders are aware of these issues; Nium’s survey of payment leaders found security as a key payment concern for businesses, followed by operational inefficiency and difficulty in managing multiple payment vendors and systems. As a result, 61% of decision-makers stated that managing payments takes too long while 48% said their company experiences reconciliation issues at least half the time when making or receiving payments.
In order to compete internationally, businesses need a reliable, efficient method of making and receiving payments that can adapt to their global needs.
The Urgency to Transform Payments
Modern payment systems are no longer a ‘nice-to-have’ and businesses know it.
99% of financial decision-makers believe upgrading their payment operations would be helpful, while 81% think they would benefit from modernizing payment operations in terms of increased speed, flexibility, and transparency of money movement.
The reasons vary between companies, but Nium’s own research found that 40% of business leaders cited accelerating digital business as a critical driver for business payment transformation, followed in importance by growing revenue, reducing cost, and improved compliance.
The urgent need for change is further accelerated by structural shifts in global business and technology, including:
- The retail-ization of business payments: The sharp rise of e-commerce, alternative payment methods, and mobile payments have created a need for faster, cheaper, and more transparent cross-border and business payment solutions.
- Growth from emerging markets such as Africa, Latin America, and Asia: These markets make up a fast-growing share of international transactions, growing at a rate of approximately 11% (CAGR). However, sending and receiving money in these markets can still be slow, leading to inefficient expansion.
- Ongoing business disruption: In an evolving market, payments need to keep up. Hiring strategies, supply chain management, and expansion are all dependent on the ability to create, maintain and adapt payment networks that can cater to changing needs.
Businesses that can leverage these trends have the chance to gain competitive advantage in their sector, but this requires a new approach.
Businesses Need Modern Money Movement
Modern money movement is the standard of moving capital quickly, easily, and safely – in any currency, using any payment method, to anyone across the world – while meeting all risk and compliance obligations.
It’s a payment architecture that can support seamless integration with multiple business applications and systems, enabling real-time information flow across them, also allowing it to grow and evolve as per changing business needs. So, what would this require?
- Local and global reach with payment licenses for every region, rather than being tied to existing pathways,
- Seamless API integration between internal and external systems, alongside sharing information instantly, compliantly, and securely,
- Flexibility to move money using a range of payment modes and methods, fully currency agnostic, in real-time.
The move towards modern money movement will be critical in driving competitive advantage through better visibility, control, and flexibility in managing a company’s real-time financial health, meanwhile empowering CFOs.
The result? Improved experiences for employees, suppliers, and customers, seamless reconciliation processes with shorter clearing windows, and better cash flow and working capital insights for executives to make well-informed decisions.
Making Modern Money Movement Reality
Building the architecture for modern money movement is a complex and specialized area of expertise. The most reliable way to achieve it is to partner with an established payments platform that can provide the technology, support, and flexibility you need.
This gives teams the space to focus on creating value from these systems via customer information, data, preferences, and better business decisions, rather than devoting resources to building and maintaining their own systems.
Nium has created a global infrastructure to power modern money movement for financial institutions and fintechs, platforms, and enterprises as they serve businesses and individuals worldwide.
With a comprehensive license infrastructure, built over time in some of the fastest-growing economies, Nium’s portfolio covers 11 of the world’s jurisdictions, enabling seamless global payments and rapid integration, regardless of geography.
Through the Nium platform, businesses can:
- Pay out in more than 100 currencies to over 190 countries, 100 in real-time.
- Receive funds in 33 markets, including Southeast Asia, the U.K., Hong Kong, Singapore, Australia, India, and the U.S.
- Access physical and virtual card issuance in 34 countries, including Europe (SEPA), the UK, Australia, and Singapore.
To find out more about how Nium is changing the face of payments, download the new report, “Essential Payments Transformation for the Modern Money Movement” or contact a Nium payment expert.