X-Border Payments Optimization Tracker™ June 2017
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X-BORDER PAYMENTS OPTIMIZATION TRACKER™ JUNE 2017 A MONTHLY UPDATE ON THE TRENDS AND PLAYERS DRIVING CROSS-BORDER PAYMENTS X-Border marketplaces FedEx bridges The top performers and the need for international borders in the X-border space better payout solutions with BlueSnap – Page 9 in our provider directory – Page 5 (Feature Story) (News and Trends) – Page 17 (Scorecard) X-Border Marketplaces And The Search for Better Payout Solutions © 2017 PYMNTS.com all rights reserved X-Border Payments Optimization Tracker™ Table of Contents What’s Inside 03 Behind the rush amongst payment service providers to offer settlements in multiple currencies. Feature Story 05 Tomas Likar, VP of strategy and business development for Hyperwallet, on building a seamless payout process for cross-border marketplaces. News & Trends 09 The latest headlines from around the world of cross-border commerce. Methodology 13 The organizing framework for evaluating the industry players that deliver merchant payment processing services aimed at enhancing cross-border commerce. Top 25 Rankings 14 The results are in. See who the top performers are. Watch List 15 The newest additions to the Tracker’s Scorecard. Scorecard 17 See how all the providers rank in our comprehensive provider directory. About 96 Information on the X-Border Payments Optimization Landscape™ and PYMNTS.com. © 2017 PYMNTS.com all rights reserved 2 What’s Inside y 2020, some 940 million cross-border shoppers Meanwhile, First Data announced the launch of its Global are expected to spend $1 trillion on eCommerce PFAC solution. The solution will give payment facilitators Btransactions, according to McKinsey. access to a single integration interface that can enable their merchants to seamlessly authorize transactions in And while growth in cross-border trade has created more than 150 currencies and make settlements in 17 new opportunities for businesses and consumers alike, currencies worldwide. for merchants supporting this growth, it has meant processing, accepting and making mass payments in a FedEx Cross Border is another company that is focusing host of currencies. on resolving cross-border payment pain points. The company has partnered with BlueSnap to facilitate sales From currency conversion and bank routing intricacies in multiple languages, currencies and payment types that to high-cost wire transfers, there are a host of issues global shoppers expect when they buy online. that merchants struggle with to make payments to their suppliers and other business partners. And, SWIFT recently announced the launch of its new cross-border payments tracker, which allows international To solve these payment pain points quickly and efficiently, payments to be followed in real time. The tracker, SWIFT payment service providers are increasingly collaborating said, has been designed to improve liquidity with cash and rolling out new solutions intended to ease the forecasts and limit exposure to forex risks associated with complicated process of transacting and settling in multiple same-day processing of funds in a beneficiary’s time zone. currencies. The secret sauce to improving cross-border payouts The June edition of the X-Border Payments Optimization For the June Tracker feature story, PYMNTS caught up with Tracker™ looks at the players that are easing multicurrency Tomas Likar, VP of strategy and business development for mass payments for cross-border commerce and ranks the Hyperwallet, a San Francisco–-based payment solutions industry players in the space. provider that globally offers payments solutions. Here’s a look at some notable recent X-border news: From partnering with acquiring banks and a host of other New York–based Transpay is ramping up its support for vendors to setting up a treasury operations for managing B2B and B2P transactions with the addition of new funding risk and keeping businesses afloat, Likar explained the currencies to its roster. The company has extended its challenges merchants face in building out a seamless support for 11 settlement currencies to eliminate the need payout process and touched upon the growing demand for for converting funds prior to settlement, which in turn a Venmo-like cross-border payment experience in the B2B makes payments faster and more cost-effective. space. X-Border Tracker June Updates The June Tracker’s provider directory features 157 global payments service providers, with five new additions: Areto Systems, CNG Pro, DalPay, Docdata and Ikajo. Additionally, there are updated scores and information in the provider directory for three companies: AltaPay, First Data and Payza. © 2017 PYMNTS.com all rights reserved 3 What’s Inside 50% The share of eWallets 53% as a payment method for eCommerce sales Percentage of Brazilians in China who shopped on international merchant websites in 2016 73% Percentage of Russian shoppers FIVE who used payment on delivery for their cross-border purchases FAST FACTS in Q1 2017 13% American eCommerce 5X sites that are targeting Arab shoppers by The cost of cross-border translating web shipping in comparison pages in Arabic to domestic shipping in European Union © 2017 PYMNTS.com all rights reserved 4 X-Border Marketplaces And The Search for Better Payout Solutions © 2017 PYMNTS.com all rights reserved 5 Feature Story Sellers are used to apps like Venmo and PayPal for their consumer needs. The same expectations are now transferring to the business side, where everyone wants to get paid by the next business day and doesn’t want to pay more than a dollar or two for the service. hen it comes to expanding operations eCommerce marketplaces operating out of the U.S. internationally, making payments to sellers and struggle to deal with the difficulties, inefficiencies and Wvendors is often an uphill battle for cross-border costs associated with international payment processes. marketplaces. These challenges often prevent companies from expanding to other markets. Entering a new market typically means setting up entirely new payout infrastructure. Companies need to partner But most of these issues, Likar pointed out, share a with acquiring banks and a host of other vendors in the common element: They are each rooted in the marketplace region, in addition to setting up a treasury operation for payout process. managing risk and keeping the business afloat. In doing so, marketplaces run the risk of creating a negative user For marketplaces, a major contributor to the problem is the experience and, according to Tomas Likar, VP of strategy wide use of decidedly low-tech paper checks when making and business development for Hyperwallet, hurting their cross-border payments. brands. “[They] are really relying on the speed of the post service In a recent interview, Likar discussed the need for speed to deliver that check, and unsurprisingly, many of these in B2B transactions, as well as the pain points of cross- checks get lost,” he said. border marketplaces and the elements that go into A number of marketplaces also partner with acquiring building a seamless payout process. Likar told PYMNTS banks and make payments using wire transfers, which that the payout side of cross-border businesses — as it are typically delivered in three to six days but can take currently stands — remains fragmented, with the absence as long as two weeks in certain countries. Because the of standardized payment rails that are commonly used for cost is unpredictable and wires are expensive to send, domestic transactions. marketplaces usually wait until a payee has reached a Injecting speed into cross-border payments minimum credit on their account before the company will According to a recent Hyperwallet study, one-third of make the payment. © 2017 PYMNTS.com all rights reserved 6 Feature Story Likar explained that making payments on a weekly or daily Meanwhile, on the seller’s side of the equation, basis is a smarter way to handle working capital. Paying expectations are continuing to change with the growth in sellers in short intervals leads to more buying and selling, popularity of P2P payment apps. which can make a visible impact on a marketplace’s bottom line. “Sellers are used to apps like Venmo and PayPal for their consumer needs. The same expectations are now Some marketplaces make faster payments by maintaining transferring to the business side, where everyone wants to multiple accounts in different countries. As Likar noted, get paid by the next business day and doesn’t want to pay this enables them to quickly disburse funds to a local more than a dollar or two for the service,” Likar explained. vendor without making a cross-border wire transfer. It’s a “That’s nearly impossible to achieve if you don’t have the viable strategy when operations are limited to a couple of scale as a marketplace.” international markets, but it can quickly become capital- intensive as marketplaces expand. Another imperative aspect of extending a seamless user experience to sellers on a marketplace platform is “It’s difficult from the banking relationship standpoint developing more efficient methods of data collection. because there are some banks that will get you into Many marketplaces, Likar pointed out, collect quite a bit multiple countries,” Likar said, “but in most cases, you will of data during onboarding, such as a seller’s bank account have to find a new partner for each country.” information or details for identity verification. Creating the ideal cross-border payout process While speed is a crucial element, the key to building the perfect payout process is developing relationships with You have to have a business partner banking partners in different markets. who understands what you do “You have to have a business partner who understands what you do and how you do it,” Likar explained. “That part and how you do it. takes the longest time.” That part takes the longest time. And while it’s relatively easy to set that up in the U.S.