Forty-one per cent of global businesses believe international business expansion is imperative to ease their current trading problems.

However, around 76% of cross-border organisations pay over $10 in transaction fees for cross-border payments, a report published by Rapyd says. Approximately 38% of businesses say they experience delays in business-to-business payments that last more than five days.

Half of the global businesses worry about inflation, followed by worries about rising interest rates (46%) and market volatility (35%).

Real-time payments, a possible solution

Cross-border trading issues feature significantly among business concerns. Around 32% of companies say they worry about currency fluctuations and 30% cite import/export challenges as one of their worries.

Real-time payment capacity would increase capital flows and help businesses deal with each other faster. Moreover, companies and consumers can use real-time payments to transfer funds at a lower cost.

However, limited real-time payment infrastructure hinders most of these ambitions.

Gardar Stefansson, CEO of Rapyd Europe, said companies “are doing everything in their power to reach new markets and open up new revenue streams”.  However, they face constant setbacks in trading with other countries. As a result, many of them lose vast amounts of money and time on cross-border transactions.

“The bigger their operations get, the more these costs rise. It’s an unacceptable situation at a time when so many advanced economies are struggling to grow”, Stefansson explained.

“Fintechs have a tremendous opportunity to help cross-border businesses with their expansion ambitions by providing faster and more cost-effective payment solutions, as well as creating innovative new approaches that simplify the way these systems operate. Ultimately, no business should have to take on the complexity of B2B payments by themselves when they’re going for growth – that’s why trusted fintech partners are critical. It’s time for fintech to step up to the plate and build bolder, better payments solutions that make cross-border trading seamless and straightforward”, he continued.

Market reaction

Some fintech companies have recently seen a surge in cross-border transactions. Last Thursday, ThetaRay reported heightened demand for cross-border payments, mainly due to financial instability.

At that time, ThetaRay CEO Mark Ganzit said the rapid increase in banking transactions adds pressure on the SWIFT system.

“The SWIFT system established in 1973 is challenged by the new world of digital banking and a massive increase in volumes. ThetaRay AI technology has been proven in leading global banks and fintechs to be efficient in enabling trusted and smooth cross-border payments”, Ganzit stated.

According to GlobalData’s “The Status of Instant Payments” report published in February 2022, the number of instant payment transactions will reach just under 200bn in 2024, up from 20.4bn in 2020.

ASEAN countries are currently collaborating on ways to create interoperability via a linked instant payment system between countries.

Similarly, global payment services have started to either partner with different services or modernise their own payment infrastructure.

On 20 March, Mastercard partnered with PXP Financial to improve international payments and remittance services. In August 2022, FIS announced it would modernise its real-time payments infrastructure, most likely in anticipation of central banks digital currencies.