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1、The Ultimate Guide to Real-Time B2B Cross-Border P1 2023 Nium Pte.Ltd.All Rights Reserved.What are real-time cross-border payments?The global RTP picture B2B cross-border payments:the current situationWhat are the advantages of real-timecross-border payments?The solutionHow Nium can help346101213Tab
2、le of C 2023 Nium Pte.Ltd.All Rights Reserved.2Not only are businesses at the mercy of volatile exchange rates but they are also burdened by the charges and delays accrued by existing international transfer processes.For any business with a global client base or workforce,this can be a substantial c
3、ompetitive disadvantage and detrimental to growth.In recent years,real-time payments(RTPs)have emerged,increasing the speed of delivery.Now payments can be initiated,cleared and settled within seconds,at any time of the day or week,holidays and weekends included.As such,across the world,modern econo
4、mies are becoming real-time by investing in RTP infrastructures,with emerging countries often leading the way and outpacing developed nations.For too long,B2B cross-border payments have been slow and expensive.Challenges still need to be solved when applying RTPs to B2B cross-border payments.Without
5、 a universal real-time payments system,individual countries and regions create their own networks and partnerships.For truly global businesses,gaining access to these networks can be costly and time-consuming.But this no longer has to be the case.Businesses and financial institutions(FIs)that can ac
6、cess those networks can mark themselves out from the pack and put themselves in a great position to forge global connections,enter new markets,and recruit the best and brightest from across the world.In this guide,well examine the cross-border real-time payments space,its benefits and challenges,how
7、 its developing,and how the right payments partner can connect businesses with the RTP networks of the world.I 2023 Nium Pte.Ltd.All Rights Reserved.3What are Real-TimeCross-Border Payments?How do they work?Real-time payments are highly efficient inter-bank electronic payments that see funds initiat
8、ed,cleared,and settled from one bank account to another in a matter of seconds via digital payment rails.To facilitate them,the governing country or region must first build those rails and the adequate surrounding banking infrastructure.The first of these,as mentioned,was Japans Zengin system.Other
9、notable networks include the RTP network from The Clearing House in the U.S.,The Faster Payments Service in the U.K.,and PIX in Brazil.Real-time cross-border payments function in the same way,just between overseas bank accounts.However,for RTPs to work cross-border,the RTP networks must be connected
10、 and have an agreement in place.Which payment methods are real-time?Real-time payments can be found across different payment methods,and whether these are RTP or not depends on the provider and the payment infrastructure in that country or region.These can include:Bank transfers P2P payments and app
11、s E-wallet payments QR code payments Request-to-payThey shouldnt be confused with fast payments such as Mastercards and Visas push payment solutions.Real-time payments are truly instant.Real-time payments are not a new concept.In fact,Japan developed the first RTP system in the 1970s.Historically,th
12、ey were aimed at domestic retail consumers,but that has expanded rapidly,and now businesses of all kinds are able to access the networks to transfer money at home and abroad.Much of this acceleration has taken place in recent years:2014Only 17 countries were live with RTPs202272%of the world either
13、had a real-time payments infrastructure live or were planning to launch one soon$200 USD2800 JPYBank ABank BCorrespondent B 2023 Nium Pte.Ltd.All Rights Reserved.4Considering the benefits RTPs can bring to businesses,consumers,and countries economieseconomies that switch from cash payments to digita
14、l payments can boost annual GDP by as much as 3%the size of the market is no surprise.Nor is the speed at which its growing.In 2022,it was valued at$17.57B and is expected to grow at a compound annual growth rate(CAGR)of 35.5%from 2023 to 2030.EuropeEurope,where RTPs have been wholeheartedly embrace
15、d,is home to half of RTP markets in the world,with 20 countries signed up to the centralized instant SEPA credit transfer(SCT Inst)scheme.Among the non-E.U.European nations,RTPs use is still high,especially in the U.K.,Switzerland,and Sweden.Latin AmericaChile,Brazil,and Mexico all have long-establi
16、shed RTP networks,while Argentina,Colombia,and Peru have recently launched their own.Many of these networks,however,operate in silos,making it particularly difficult for Latin American businesses to transfer money to businesses based in other countries within the region,let alone businesses from fur
17、ther afield.Middle East and AfricaSeven markets across the Middle East and Africa now offer real-time payments,according to Worldpays 2022 Global Payments Report.The majority of those,however,are based on government payments driven by request-to-pay and QR codes.For example,Ghana,UAE,Bahrain,and Ken
18、ya offer RTP government collection or payout services.AsiaWhen it comes to real-time payments,Singapores FAST played a pioneering role as one of Asias earliest instant payment services,facilitating electronic transfers in Singapore dollars instantly.This growth in real-time aligns with the Asia-Paci
19、fic(APAC)region at the forefront,leading the charge.The International Monetary Fund(IMF)projects an uptick in the GDP growth rate for Asia-Pacific,from 3.8%last year to 4.6%in 2023,with the area poised to contribute over 70%to global growth this year.This Asian dominance is a result of strong govern
20、ment support for RTPs,driven by the need to bring populations with typically high levels of unbanked citizens into digital finance.United StatesThe U.S.has been slow to the party but is making rapid progress.It already has two operational and complementary real-time payment services:The Clearing Hou
21、ses RTP and Zelle,from Early Warning Services.A third option,the Federal Reserves FedNow,is expected to launch in mid-2023.The Global RTP Picture$17.57BRTP market size in 2022 35.5%Compound annual growth rate from 2023 to 2030 2023 Nium Pte.Ltd.All Rights Reserved.How Countries Connect Their Real-Ti
22、me Payment Networks5While domestic RTPs may be becoming commonplace in much of the world.Cross-border RTPs are still considerably harder to find.In the more than 50 years since Japan launched the first real-time payment network,countries worldwide have created their own unique infrastructure.This,in
23、 turn,has created a bloated network of contrasting networks.So while it may be quick,easy,and cheap to transfer money to a business in your own country,making an identically sized transfer to a neighboring country can take considerably longer and cost far more.However,a number of countries are now c
24、onnecting their RTP networks.Of all the regions,this is accelerating most quickly in Asia and among Southeast Asian countries in particular.Singapore,Thailand,Malaysia,Indonesia,and the Philippines have recently established,or are in the process of establishing,connections between their national pay
25、ment systems under the ASEAN Payment Connectivity initiative.Elsewhere in the region,Singapores PayNow network has linked with Thailands Promptpay,Malaysias DuitNow,and Indias UPI.While India has also forged relationships with,among others,Malaysia,UAE,and France.In Europe,businesses and citizens ba
26、sed in the eurozone can transfer funds instantly to each one of two pan-European networks,EBA Clearing RT1,and the ECBs TIPS.However,the blocs connections with countries outside remain less developed,but there are signs of progress.In April 2022,Europes EBA Clearing,the U.S.s The Clearing House,and
27、the global payments network SWIFT launched a pilot for a cross-border real-time payment service so banks from both sides of the Atlantic can exchange payments with a full-service offering in 2023.It is important to mention that although an increasing number of countries are currently establishing co
28、nnections for their real-time payments networks,these linkages often remain restricted to just a select few banks or participants.However,by partnering with a B2B cross-border payments provider such as Nium,it becomes possible to effortlessly connect and facilitate payments across a diverse array of
29、 countries.Bank ABank BBank ABank BCorrespondent Banks$200 USD2800 JPY 2023 Nium Pte.Ltd.All Rights Reserved.6While some countries have begun forging relationships for businesses based outside of the networks or those looking to transfer funds to a country outside of them,the B2B cross-border paymen
30、t experience remains challenging.Although new technology has undoubtedly improved the domestic payments space,it has made the B2B cross-border payments landscape more fragmented and competitive,with fintechs,digital banks,big tech,and incumbent financial services players adopting new tools to remain
31、 relevant.As such,many incumbents still rely on a patchwork of outdated networks,time-consuming manual processes,and inefficient networks of partners to enable payments,driving up costs,slowing the payment flow,and not providing a best-in-class customer experience.All of this is happening at a time
32、when global businesses are facing a transforming B2B payments landscape,driven by three key trends.B2B Cross-Border Payments:The Current S 2023 Nium Pte.Ltd.All Rights Reserved.TREND 17Triggered by the pandemic and a raft of technological advances,its now commonplace for businesses to have far more
33、international workforces.According to a Nium survey,between 2020 and 2021,the share of firms that expanded their hiring of international workers grew nearly six times,from 8%to 46%.Not only are these employees overseas,but theyre also remote.In 2019,just 17%of global employees worked remotely.Today,
34、32%are now entirely remote,with 51%working in a hybrid work/home environment.Furthermore,they often consist of full-time staff as well as domestic and,increasingly,overseas freelancers.Sixty-eight percent of companies in the U.S.have outsourced their services to low-cost countries.This poses a numbe
35、r of payment challenges.Complex expensesThe growing size and variety of expenses mean employees need to be reimbursed immediately.Despite this,one-third of staff still wait over a month for expense reimbursement.Not only is this unfair to the employee,but it puts the business at risk of losing them,
36、with 76%of financially stressed employees admitting to being attracted to other companies.Costly exchangesThe cost of paying workers in their local currency can vary significantly due to fluctuating FX rates,bank charges,and transaction fees depending on the payroll service provider or rails involve
37、d.Need for faster paymentsWhen working with emerging markets,the speed of payment is a key capability.In Malaysia,for example,55%of on-demand workers have less than three months financial buffer.Meanwhile,in India,88%of the on-demand workforce runs out of money before the month is even out.Contrasti
38、ng payment methodsNearly two billion adults globallyone-third of the worlds adult populationremain unbanked,with almost all living in emerging markets.In response to the lack of traditional infrastructure,more people in these regions turn to alternative forms of payment,with the share of adults maki
39、ng or receiving digital payments in developing economies growing from 35%in 2014 to 57%in 2021,outpacing growth in account ownership.Global and remote workforcesFirms that expanded theirhiring of international workers202046%8% 2023 Nium Pte.Ltd.All Rights Reserved.8Global businessesTREND 2The corpor
40、ate world is now a global playing field,with the ability to expand overseas vital to stay competitive.Forty-nine percent of U.S.companies surveyed in 2021 said their best opportunities are outside of their home region,compared to 35%in June 2020.Meanwhile,an HSBC poll of mid-market enterprises acros
41、s 14 different markets in late 2022 found that two-thirds planned to expand internationally in the next 12 months.This,too,poses new challenges.of businesses say they worry about fraud and data security when receiving international payments.Increase in B2B cross-border paymentsFifty-eight percent of
42、 SMEs say they are sending and receiving more B2B cross-border payments now than before the pandemica significant increase from 2020,when 38%surveyed said they had increased their use of B2B cross-border payments since the pandemic began.Despite this,U.S.businesses still wait an average of 33 days t
43、o receive payments from their cross-border business partners,while U.K.businesses wait an average of 30 days.30 daysU.K.33 daysU.S.Compliance and security concernsTo transfer money and operate overseas without the use of a B2B payments provider,global businesses must forge new banking relationships
44、and gain access to local rails,all while making sure theyre compliant with local regulations.Doing this is costly and time-consuming.This also raises concerns around security,with nearly 55%of businesses saying they worry about fraud and data security when receiving international payments.55% 2023 N
45、ium Pte.Ltd.All Rights Reserved.9Thirty-nine percent of SMEs now say that cross-border payments slow down our supply chain while 36%say theres no transparency about how much money we lose in foreign exchange.For modern businesses and consumers,this just isnt acceptable.They expect B2B cross-border p
46、ayments to be as fast and intuitive as other areas of their digital lives.The growth of e-commerce,alternative payments methods,and mobile payments have created a need for faster,cheaper,and more transparent B2B cross-border payment solutions,but existing systems are falling behind.As a result,72%of
47、 SMEs are using web-based payment platforms from banks,money transfer companies,and other providers,and approximately two-thirds are using mobile apps.Real-time cross-border payments,along with the right B2B payments partner,offer a solution to these problems.End-users now expect moreTREND 3of SMEs
48、are using web-based payment platforms72%of SMEs say there is no transparency about how much money is lost in foreign exchange36%of SMEs say cross-border payments slow down their supply chain39% 2023 Nium Pte.Ltd.All Rights Reserved.10 1 SpeedWire transfers and other payment methods are often ill-equ
49、ipped to keep international partners and employees satisfied.These transactions pass through an average of six financial institutions(FIs),and wire transfers can take as long as five days to arrive.Even payments that may appear in real-time often arent and,in fact,take hours or even days to settle.R
50、eal-time payments arrive in seconds,bringing clarity to cash management and allowing account holders to access funds instantly.What are the Advantages of Real-Time Cross-Border Payments?Unlocking the potential of real-time payments is a game-changer for businesses operating on a global scale.Traditi
51、onal payment methods often fall short when it comes to speed and efficiency,causing delays among international partners and employees.However,real-time payments offer a solution by enabling instant fund transfers and providing businesses with a competitive advantage.With the ability to expand into n
52、ew markets,hire global workers,and establish international supply chains seamlessly,businesses can operate like local enterprises,reducing risk and increasing attractiveness to 2023 Nium Pte.Ltd.All Rights Reserved.11 2 Competitive advantageThe ability to transfer funds overseas instantly allows bus
53、inesses to expand into new markets,hire global workers and build international supply chains in an incredibly streamlined way,as businesses can make payments just like theyre a local enterprise.This not only reduces the risk but makes businesses a far more attractive prospect for partners,customers,
54、and employees.3 Simpler innovationA modern,open payments system affords the chance to generate and implement innovative overlay services upon real-time payment rails,built with current open banking standards through API-based services.4 End-to-end communicationIn the past,communication typically occ
55、urred in a one-way fashion:from the payer to the payee.To exchange information bilaterally,parties had to resort to methods outside the payments system.However,with real-time payments,the payment,and its associated data are combined into a single transaction.5 CostCosts for sending funds overseas re
56、main high,with the global average being 6.5%of transaction value,rising to 8.2%in some regions.While RTP costs differ from network to network,they often tend to be cheaper than the slower alternatives.6 Liquidity managementReal-time payments can also greatly support a businesss liquidity management.
57、By providing businesses with faster access to funds,businesses can better manage cash flow and take advantage of market opportunities.This can be especially beneficial for small and medium-sized businesses,which are often more reliant on cash flow to stay afloat.Despite global innovations,accessing
58、the global al-time payment space is difficult for most businesses and financial institutions to do on their own.Costs for sending funds overseas6.5%8.2%Transactions pass through an average of six financial institutions(FIs),and wire transfers can take as long as five days to arrive.SENDERRECEIVER 20
59、23 Nium Pte.Ltd.All Rights Reserved.12A truly localized payment offering should provide real-time payments in multiple currencies via local and international payment rails and be entirely compliant with local regulations and have access to competitive foreign exchange rates.Although this can be done
60、 independently,it is not feasible for most.Instead,its important to find the correct B2B payments partner that has the payments infrastructure,rails,and relationships that meet the requirements of todays global businesses.The Solution?The Right Real-Time Payments Partner.Nium Real-Time Payout Countr
61、iesPayout CountriesReal-Time P 2023 Nium Pte.Ltd.All Rights Reserved.13Nium has worked with leading institutions across the world to gain access to a number of the leading real-time payment networks.Using a secure,modular API suite,global businesses can access fully compliant payment rails,with regu
62、latory licenses and authorizations in over 40 countries,enabling seamless payment acceptance regardless of geography.Nium can:PAYOUTPayout in more than 100 currencies to over 190 countries,100 in real-time.RECEIVE FUNDSReceive funds in 33 markets,including Southeast Asia,the U.K.,Hong Kong,Singapore
63、,Australia,India,Latin America,and the U.S.COLLECT FUNDSCollect funds in local payments,hold in a virtual wallet,and payout in local currencies in 35 countries.ISSUE CARDSAccess physical and virtual card issuance in 34 countries,including Europe(SEPA),the U.K.,Australia,and Singapore.How Nium Can HelpTo find out more about how Nium can aid your business or financial institution in accessing the worlds real-time payment networks,book a call with one of our payment experts today.Contact usReach Out to Learn More