How fintech changes international remittance and expands business
The fintech market has grown exponentially in recent years, reaching an estimated $ 310 billion in 2022, an increase of $ 182 billion from 2018. As companies around the world adopt fintech solutions, many are still left behind by the digital revolution, using archaic means of payment to fulfill orders and complete backend processes.
Older payment methods increase the risk of fraud with B2B payments and underline the need for organizations to use a technology-enabled payment infrastructure to secure their capital against fraudsters. However, Fintech is changing the landscape, offering fast, secure, transparent cross-border transfers to organizations around the world.
Payment fraud is on the rise
In business, security is the resting pulse for success, but many small and medium-sized businesses fail to protect their capital in the fight against fraudsters. A common assumption is that older payment methods such as checks and bank transfers are a thing of the past – but this is incorrect. According to the US Fedwire Authority, over 204 million individual transfer transactions were logged in 2021, equivalent to nearly one quadrillion USD, with much of it from international transactions.
Unfortunately, criminals take advantage of outdated payment methods for financial gain, using virtual interaction platforms to hack emails and falsify business leaders’ credentials to initiate fake bank transfers. Considered a federal crime in the United States, bank transfer fraud is on the rise and is hitting businesses hard.
In December 2021, a bank transfer of over $ 1.5 million to a fake US domestic bank account was intercepted by the Internet Crime Complaint Center (IC3), freezing funds and enabling full recovery. But with over $ 6.9 billion lost on counterfeit transfers in 2021, and an estimated 12-15 percent of all unreported bank transfers, many companies are not so lucky. Fortunately, effective all-in-one methods of financial technology are revolutionizing the payment industry, securing cross-border payments against criminals.
Prevention rather than cure
Financial technology is expanding the scope and efficiency of the international banking sector, with virtual accounts taking minutes to set up, while cross-border online payment methods are becoming efficient and available means of payment.
It is easy to prevent fraud through online payment providers, and companies can gain security in their international transactions via encrypted two-factor authentication and SMS verification procedures in the app that confirm the recipient and the payee.
Managing all your revenue currencies and paying a vendor directly, within an all-in-one payment platform, secures companies against the risks inherent in bank transfers, which often go through multiple intermediaries. The payment room, and the criminals who operate within it, are moving faster than the banks can keep up.
Innovation requires technology
The mercury character of the payment area is suitable for rapid technological methods that can evolve over time, verify and control suppliers in foreign countries, and ensure that their bank account information is linked to that company so that organizations do not need it.
By using all-in-one payment providers, companies can leverage their vast network of vendors to ensure that all uploaded invoices are verified to ensure that recipient information is accurate. This helps customers avoid losses from fake invoices or changed route information that will benefit fraudsters. Ensuring that validation on both sides of the transaction takes place is an additional team support to ensure that companies can scale internationally and at the same time limit risk.
Growth as an opportunity
The introduction of fintech will prove to be a useful tool in an organization’s toolbox, as US companies reduce the evergreen risks associated with bank transfers. However, financial technology can also expand a company’s event horizon for international growth. A study conducted by PriceWaterhouseCoopers found that 94% of financial services were confident that fintech would expand its business over the next few years. Confidence in fintech in the banking area has shown that 47% of financial service companies worldwide are likely to partner with a fintech company, illustrating the changing attitudes towards technology.
US companies implementing fintech solutions to automate their backend processes and cross-border transfers can improve the flexibility, security and flexibility of payment infrastructure. By venturing into several international markets by using the availability of financial technology to send and receive payments around the world for a fraction of the time and expense it will take to set up a local bank account, SMEs can reinvest funds back to their growth strategies, which represent a more efficient and sensible approach to payments.
About Kenny Tsang
Kenny Tsang, Global Managing Director for PingPong Payments, has been with fintech Unicorn for over 4 years. Previously overseeing PingPong’s expansion in India, Korea and Vietnam, Kenny is currently based in New York.
About PingPong payments
Founded in 2015, Fintech Unicorn PingPong Payments has processed more than $ 100 billion in cross-border payments, helping SMEs save money on cross-border payments, VAT and vendor payments in over 170 countries around the world.
