International payment platforms (international payment solutions) for traditional business!
International payment platforms emerged on the market not long ago. In the beginning we heard many questions like what it is? how it can be used? what is their difference with traditional bankers?
Please note! That in this article we are not going to review payment platforms related to cryptocurrency and stock exchange products, we shall not consider traditional payment gateways for online retailers as well. Here we mostly focus on traditional banking tasks, like international trading, international logistics and bank solutions with pure bank account for online retailers worldwide.
Since 2014 in the era of new global crises and new sanctions’ restrictions on businesses worldwide, banking industry has faced significant changes. Changes which modern people would hardly believe a decade ago. International and local regulators made decision to finish money movement freedom era, banking secrecy has become not an inviolable matter, new terms like banking risks, banking insurance and fines had appeared in business; as the result bankers started to close bank accounts of the clients where the risk of client’s operation they found not suitable for them, thousands of restrictions appeared for capital movement between countries, currencies and bankers. One of the results was the fact that banking account was almost impossible to open for some businesses and some passport holders. Secondly, one more important thing, which happened in 2020 was a global pandemic, which made visit to another country for bank account opening meeting almost impossible. Thirdly, electronic commerce was developing so fast, that traditional bankers couldn’t catch all the trends with new products launching. Grounds and features of these processes we may look more closely in other articles. It’s fantastically interesting.
But it’s really an interesting fact, that at the moment when it had become almost impossible to open bank account for some passports and businesses, solution appeared. And solution was payment platform. International payment platform – it’s financial organization, which has strong arrangement with the traditional banker or bankers and provide banking services to their clients by means of their partners, i.e. traditional bankers.
So what are the differences between international payment platforms and traditional bankers?
- Payment platform can use in its business process not only one banker, sometimes these bankers are in different parts of the world, thus payment platform may provide great possibilities in cross-border payments with different currencies.
- The base of payment platform is high-quality online platform, which should be easy-to-use, high-tech, and on-going developing.
- Usually payment platforms have more possibilities to accept more types of businesses and passport holders from higher risk countries. Sometimes it’s impossible to open bank account in a certain bank for certain type of business under certain passport holder as the beneficiary. But that may become possible in the payment platform which is using the same banker for their payments. It sounds untrue. But it’s really the fact. Furthermore, the major shareholders of payment platforms usually are traditional bankers, who really understand that they need more instruments and more space for development, which heavily regulated traditional banking sphere are not able to provide to them.
- More instruments for business operation. Some payment platforms have integrated systems for work with online retailers and online platforms, like Amazon, Ebay; some payment platforms have special conditions for currency exchange; some are specializing on financing some types of businesses, online retailers for example.
- Limit services of payment platforms. Of cause, payment platforms lack some services, which traditional bankers can provide. For example, they can’t accept and issue checks, work with letter of credit and so on. And the most important limit for some payment platforms, that they have to provide their company name to act as beneficiary and remitter for their client’s payment instructions.
It’s not the full list of all the differences between traditional bankers and payment platforms, but we suppose that those which are discussed above are the most important to consider.
So what should the clients pay attention first of all if they consider to choose payment platform for their business?
- Jurisdiction. Of cause, you need to consider which jurisdiction the banker of payment platform is stationing. Some offshore jurisdictions may offer greater functions, but it doesn’t make sense if your partners neither can arrange payment there nor receive money from the jurisdiction.
- No doubt, that payment platforms which can provide their clients trustworthy payment instructions with beneficiary and remitter under client’s name, have great advantages to compare with the payment platform which can only show payment platform’s name as beneficiary and remitter.
- You also should consider the payment route. Payment platforms which can provide clear payment route of correspondent well-known trustworthy banks in good jurisdictions for your payment routine have strong advantages for your business.
I would say that above criteria are fundamental while choosing payment platform for your business. After these criteria, you can continue to value other important things like: the possibility of opening account in the payment platform, banking commissions in operation, functions and usability of internet banking, currency exchange rates, possibilities of payment platform for financing your business, integrating it to your online business and so on.
This theme is very wide and actual. In future, we shall continue to introduce different payment platforms and their features as well as more actual subjects related to payment platforms.
And of cause, if you have questions on choosing and working with payment platform, we recommend you to seek for professional advice of CorpProm specialists.