The evolving future of cross-border B2B payments
As business continues to expand globally, innovative solutions are emerging that reimagine how B2B cross-border payments are made. These evolving solutions are offering important advantages to banks and their customers – providing greater optionality, improved transparency, increased predictability, enhanced compliance, and better access to vital data.
Cost savings remains another important benefit of adopting a multilateral cross-border payment solution, as expenditures associated with managing intermediary bank relationships are eliminated. Look no further than nostro accounts, for example. The average annual cost of maintaining these accounts among global banks can amount to $1.5 billion*; while maintaining just one of these accounts costs a US bank $27,270 each year*. That’s a lot of money.
A centralized, permissioned network, where all participants are known participants, will enable payments to be processed securely and directly, thus minimizing the expense of maintaining nostro accounts.
The future of B2B cross-border payments promises to be simpler, secure, lower cost and more transparent. Geographic barriers will gradually be eliminated in this rapidly evolving global payment ecosystem. Banks can be expected to partner with fintechs and other innovative players to bring new technology to the space, tapping into their expertise as digital natives, with the goal of strengthening customer relationships. Modernization is here for cross-border payments and that’s a good thing for everyone involved.
* Research conducted by East & Partners Europe, June 2019; Visa B2B Connect: Voice of the Customer – Banks Markets Report.