For many UK-based companies, whether using suppliers abroad or growing their international workforces, making and receiving international payments has become a regular activity. But a range of payment pain points and knowledge gaps can create serious challenges
Sustaining a global footprint of any scale requires businesses and public sector bodies to take a smart and long-term approach to their global payments, to avoid some serious and potentially costly pain points.
Traditionally, foreign payments have been left to well-known providers but now, with the help of new technology, rival providers are entering the market, tackling the common pitfalls and enabling organisations to pay the right person the right amount, at the right time, anywhere in the world.
There are myriad reasons why an organisation might need to make payments in local currencies around the world. These can include international expansion, setting up a technology or other specialist team abroad, working with new suppliers elsewhere and needing to pay pensions to ex-employees who have retired in other countries.
“Foreign payments are frequently needed by organisations and the importance of minimising pitfalls is not solely the responsibility of finance departments,” explains Lisa Cowan, director of growth strategy at Equiniti’s business payments division. “With departmental heads acting on strategy, it can introduce new payment needs.”
There is a strong demand in the market for a single platform on which all international and domestic payment needs can be served
Currently, companies tend to utilise multiple partners and in-country providers when making international payments. This can require the finance teams to use a host of systems to manually build payments directly with each provider, taking into account varying formats and requirements. Additionally, their banking partners or brokers may not offer full currency coverage to small or medium-sized organisations, or support contractors’ newly preferred payment methods such as delivery into digital wallets or card accounts.
“Not having access to a single platform that will serve international and domestic payment needs is a major pain point organisations face in this area and is starting to cause friction for businesses as they manage multiple partners,” says Ms Cowan. “On top of this, businesses want the transparency and security of a bank, but with the ability to make payments quickly to a wide range of locations in local currencies.
“Given that not all banks or financial institutions offer the truly wide range of currencies that businesses can require, a number of these organisations now use our services so they too can support clients of all sizes to execute payments in multiple additional currencies.”
There are two additional challenges for businesses making payments abroad. First are the potentially unexpected fees applied to their transactions, as well as foreign exchange risk, which is especially critical for payments being agreed now, but drawn down at a future date. Then there is compliance with local regulations.
“In-country nuances need to be considered, particularly when they’re relevant to taxation and accurate salary payments. Many businesses do not have the time, resources or expertise to address these efficiently,” says Ms Cowan.
As a result, the industry is looking to tackle these problems, compliantly serving multiple countries and currencies, in a simpler format and without unexpected costs. A company leading the way with its single business payments platform is Equiniti. The payment provider works with numerous organisations, including large banks, providing access to an extensive network of 180 countries and 133 currencies.
Equiniti’s business payments division, which is regulated by the Financial Conduct Authority and is compliant with Electronic Money and Payment Services Regulations, offers comparable security and transparency to an established bank, while providing easy access to account managers with extensive in-country expertise. Its single, online business payments platform enables clients to make business payments confidently to the right person, at the right time and for the right amount, anywhere in the world.
A London council recently worked with Equiniti to streamline its previously paper-based overseas payment processes. It introduced a tailored digital solution to deliver payments to foster carers, who are often adult relatives or family friends of children it retains responsibility for, but who live abroad.
Meanwhile, a pharmaceutical firm brought in the provider to establish a single, end-to-end payment process that reaches more than 1,800 employees in 15 different countries.
Elsewhere, a leading university enlisted the help of Equiniti to create a single payroll and payments solution, enabling it to easily and cost-effectively pay its employees in Dubai, some of whom are UK citizens and others nationals of the United Arab Emirates.
As international payments present increasing demands on businesses, the issue of how to make overseas payments without unnecessary complexity is growing in significance. In addition to finance teams, everyone is taking note, from technology staff, sales force personnel and product developers, to supply chain leaders, payroll managers, human resources directors and chief executives.
“There is a strong demand in the market for a single platform on which all international and domestic payment needs can be served,” says Ms Cowan. “That is currently a gap not readily served by traditional banks or foreign exchange providers. Businesses are looking for a way to transact on one, easy-to-use platform, without incurring unexpected costs, yet with the reliability, transparency and security of traditional financial institutions.”
Equiniti has focused on making its business payments platform easy to integrate with organisations’ existing systems and authorisation workflows, and ensuring it is adaptable and flexible, with extensive reach and backed by proper customer support. It also provides data validation within the system to ensure payments are processed successfully.
As the need for international payments becomes more prominent to support business growth and supplier strategies, many companies will continue to face a range of pain points. The business payments team at Equiniti is making sure they can avoid these problems and enable companies to successfully pay people and organisations, no matter where they are in the world.