What Are Cross-Border Payments? Cross-border payments are financial transactions where the payer and the recipient are based in separate countries. Let's explore more in this article.
What Are Cross-Border Payments?
Cross-border payments can be conducted between individuals, companies, and financial institutions and occur when the payer and the payee are in different countries. Global cross-border payment flows are expected to reach $156 trillion USD by 2022, making them one of the components of the global payments ecosystem that will expand the fastest.
Why Use Cross-border Payments?
Changes brought about by globalization, digitalization, and the growth of eCommerce have made it possible for a truly global marketplace. In this environment, merchants have the opportunity to reach new customer bases and enter new markets, but in order to do so, they must first be aware of the specifics and expectations of customers in other countries.
For example, merchants who wish to grow their customer base in Europe would do well to offer SOFORT, an online payment system that acts as an intermediary between buyers and merchants. It is widely used in Germany, Austria, Belgium, the Netherlands, Poland, Italy, Spain, and Switzerland. SOFORT is owned and run by Klarna. Similar to how PayPal is one of the most widely used payment methods in the region, businesses looking to do business in Latin America should accept voucher-based payment systems like Boleto in Brazil, OXXO in Mexico, and Via Baloto in Colombia.
Cross-border payments are meant to assist businesses in tailoring their global commerce strategy to local markets. By providing consumers in various regions with payment options they are accustomed to, businesses can improve the customer experience and tap into new revenue streams.
What Are Cross-Border Payments? Why Use Cross-border Payments? - Hopefully, this article can help you to get some knowledge.
