The value of B2B cross-border payments is projected to grow to $42.7 trillion in 2026, based on a Juniper Research study which estimated its current value at $34 trillion in 2021. The transparency of cross-border payment is the most important aspect of cross-border.  This is the reason 82% of banks have rated gaining visibility in cross-border payment as key and have begun to seek digital solutions for B2B cross-border payments.

 

With the harsh environment like cyber fraud that banks and businesses operate in globally, there are different new technology solutions that foster transparency, cost optimization and seamless B2B cross-border payments.
 

This article addresses all you need to know about digital solutions for B2B cross-border payments. Here, you will know what B2B cross-border payments are,  the challenges affecting B2B cross-border payments for banks and businesses, and the technology that offers digital solutions to the challenges of B2B cross-border payments.

 

What is Cross-Border Payment?

 

Cross-border payments, also called swift payments or wire transfers. It is an international way of transferring of money across the borders of two countries. 

 

What are B2B Cross-Border Payments?


 

B2B cross-border payments are transactions of currency between businesses located in different countries. 

 

Other types of cross-border payments include:

 

  • B2C (Business to Consumer)
  • C2B (Consumer to Business)
  • C2C (Consumer to Consumer). 

 

Among the types of cross-border payments, the most common type is the B2B cross-border payment.
 

Recommended: Cross-Border Payment and Types of Cross-Border Payment


 

What are the Challenges affecting B2B Cross-Border payments?

 

The advent of B2B e-commerce has made cross-border payment very common. B2B cross-border transactions are regarded as complex transactions for global businesses and banks especially due to the following reasons:

 

  • Cross-border payment regulations.
  • Limited transparency/visibility in the status of payment as both the originating bank and the beneficiary bank is oblivious of where the transaction is at a given time as it is routed across multiple correspondent banks.
  • The unknown cost that will be incurred.
  • High cost due to international charges, and middle-men processes.
  • Non-predictability of when payments will arrive and what amount will be received as a result of currency exchange calculations and several fee deductions.
  • Know your Customer-KYC regulations.
  • Compliance with Anti-money laundering (AML) regulations which lead to delay
  • The different payment structures that operate in different countries.
  • Method of payments e.g electronic transfer, wire transfer and their compliance requirements
  • The non-assurance of sending a correct document by the payer.
  • The rules regulating cross-border transactions are different.
  • The long settlement periods.
  • The complex internal business processes and operations.
  • The transaction security and compliance regulations.

 

All these factors are responsible for the slowness, non-transparency and expensive nature of B2B cross-border payments. Banks are thus left to deal with all these challenges.

 

To make things easy and play safe at the same time,  smart banks are giving their attention to businesses that are interested in leveraging digital solutions for  B2B cross-border payments. 

 

This not only makes tracking of transaction monitoring processes in banks easy, but it also helps businesses save costs and make better decisions.
 

Moreover, banks can also ensure they are complying with FAFT on AML regulations and also perform customer due diligence. Doing this helps banks stay away from getting fined.

 

Recommended: FCA Fines: FICA fines Al-Rayan BAnk for Laxity in Implementing Anti-money Laundering controls


 

Exploring Digital Solutions for B2B Cross-Border Payments.

 

One of the ways to improve B2B cross-border payment is by bringing transparency into the movements of transactions. 
 

Digital solutions in form of ledger technology, artificial intelligence, and cloud solutions have been created to address these problems.

 

These solutions have been designed to meet the demands of banks and create a better customer experience for global businesses. Banks and businesses can get protected from cross-border fraud.

 

They help in the following ways:

 

  • Improve transparency
  • Increase predictability 
  • Enhance compliance
  • Have access to important data
  • Save cost by eliminating intermediary bank relationship

 

Ensure your Compliance with Youverify KYT Digital Solution
 

Aside from knowing the status of your cross-border transaction, another important key to the success of your cross-border payment is compliance. A known cross-border transaction status is not successful if it does not comply with FAFT regulations.

 

In fact, successfully transacting ‘dirty’ money across the border of your country has a high risk of blacklisting the bank and the business involved.

 

There are digital solutions which help to ensure you stay compliant as a financial institution. 

One such solution is Youverify KYT - Know Your Transaction- a digital solution. 


 

Youverify-Know Your Transaction- Solution

 

Youverify KYT solution helps you monitor and detect suspicious customer activities through an AI-powered elaborate transaction monitoring solution. Also, you can get access to ready-to-use scenery or create your industry-tailored custom rules.

 

Join the 100+ customers who are experiencing the digital solutions Youverify KYT offers. Interested in knowing how this works? Request a demo