APIs Prove Their Value in Overseas Expansion
Fueled by ever-better digital services and the siren song of new customers in overseas markets, businesses are still grappling with cross-border payments issues, for which remedies now exist.
PYMNTS’ report “The New Instant Enterprise: How Borderless Financial Services Fuels E-Commerce Innovation”, a USEEND collaboration, explores how enterprises and SMBs benefit from agile API solutions that remove the frictions of international trade.
“Companies in developing countries that trade across borders, especially those with volatile currencies, often face the high opportunity cost of holding all their funds and operations in local currency,” according to the report. “Business owners in developing economies face many challenges at every stage of growing their business when it comes to their most critical operation: managing payments.”
Increasingly, the answer is to take “a risk-based approach when choosing a user or merchant authentication method. Access to a payment services platform or solution that uses extensive contextual data to approve each payment or user or merchant use case is essential for e-commerce businesses that want to avoid fakes. denials or suppliers unnecessarily flagged.
Risk assessments and relevant data
One of the most common and effective methods of eliminating bottlenecks in cross-border payments is the use of application programming interfaces (APIs), which connect disparate systems with digital precision and speed. essential to the growth of e-commerce operations.
According to the report, “an API-based solution allows companies to outsource the most complex payment elements to a payment service specializing in payment authentication and processing. Using an API payment option, e-commerce businesses can allow customers to pay or receive refunds in local currencies directly within apps or through their websites. »
In regions “where currency values may fluctuate frequently and where consumers may find it difficult to assess e-commerce prices and maximize their purchasing power using traditional bank or credit cards”, the approach API is particularly useful for online operations.
This also extends to transaction security and AML/KYC compliance. As the report states, “Risk assessments must be made with context and relevant data in mind. A secure, regulatory-compliant API-based solution can help new and established businesses build and maintain a fast-to-market strategy by eliminating user authentication and payment bottlenecks. Automating user authentication and payments through an API means applications, platforms, and websites can support exceptional user experiences at scale.
Partnership for cross-border success
Established and emerging e-commerce businesses face similar hurdles not only to clear payments from abroad in the currencies and methods of their choice, but also to stay compliant with the tangle of cross-border payment regulations. which have regional and other nuances.
Partnering with a payment service provider (PSP) with the technology and experience can make moving money across borders much easier, as many are discovering.
According to the new report, “An API-based solution is fueling rapid e-commerce growth through rapid onboarding and secure transaction management. The right PSP will enable e-commerce businesses and marketplaces to send and easily receive payments to and from customers and merchants in developing countries KYC and KYB compliant PSPs handle the intricacies of global regulatory compliance for their customers, allowing US-based entities to easily trade with customers and traders in developing countries.
This applies as much to companies expanding outside the United States as it does to those expanding into the United States in search of new customers and significant market potential. But problems arise when companies don’t have a US bank account, for example. Brazil is an excellent example for eliminating these obstacles.
As The New Instant Enterprise reports, “Potential delays in opening a US bank account can last for months, if opening such an account is possible. A European entrepreneur could attempt to sell goods from Brazil to Europe and the United States online, but the complexity of local currency fluctuations, regional delays in setting up accounts, and differing compliance with KYB and KYC regulations may halt the effort completely.
Again, the report concludes that “choosing the right payment management solution is essential for managing compliance, data security, and a high-quality customer experience.”