Highlights
Integrated banking solutions and digital-first services are critical for streamlining cross-border trade, as chief financial officers and treasurers value banking products that integrate with their operations to reduce friction, enable faster approvals and facilitate smoother fund flows.
Digital wallets offer an advantage for faster, more transparent cross-border payments, particularly for SMBs, by reducing processing times from days to minutes, which builds trust between parties.
Technological advancements like ISO 20022 are enhancing transparency and enabling real-time processing in cross-border fund movements, addressing long-standing friction points related to tracking and settlement times.
Beyond the headlines on tariffs, trade and their macroeconomic implications, the back and forth about exports and imports highlights the importance of smooth fund flows across supply chains.
Banks and FinTechs are in the middle of it all, enabling commercial payments that cross borders. Foreign exchange (FX) rates and transparency into the payments themselves — in terms of tracking them and when they settle — have long been points of friction. Trade credit and digital payments have become essential to the functioning of supply chains.
The PYMNTS Intelligence report “2024-2025 Growth Corporates Working Capital Index,” a collaboration with Visa, found that 7 in 10 users of financing reported improved buyer-supplier relationships. Nearly 1,300 chief financial officers and treasurers said they value (and want) banking products that integrate with their own operations to smooth those trade-related cross-border pain points, such as corporate cards.
“They also expect bankers to offer digital-first, friction-free services with faster approval processes aligned with their strategic growth agenda,” the report said.
A June 5 paper by the Bank for International Settlements underscores the benefits of tighter links forged between the key players in commercial payments and international interactions.
Integrating payments can have “potentially large positive externalities for both trade and banking integration,” the paper said. “Allowing money to more easily flow across borders facilitates both goods and services trade and enables the delivery of cross-border financial services and asset holdings. This, in turn, reduces costs for trade-related payments and can help to facilitate necessary cross-border credit flows for working capital and foreign direct investment. In addition, effective cross-border supervisory cooperation is key for advancing banking integration, as comparable rules and standards facilitate cross-border payments and the development of regional banking markets.”
Part of that easing would come through the “digitalization of trade,” the paper said.
PYMNTS has tracked the continued emergence of digital-first, cross-border payment providers and platforms. Digital wallets remain an area of promise for accessing and embracing digital payments and embedded finance.
Most consumers use digital wallets, but fewer than half of small- to medium-sized businesses (SMBs) in the United States have enlisted them as part of operations. The PYMNTS Intelligence report “Global Money Movement: U.S. Edition” found that the lack of digital wallets as an industry standard was cited by 33% of firms as an impediment, and more than a quarter said they were unsure of whether their international partners could accept the method.
“Digital wallets can reduce payment processing times from days to minutes,” PYMNTS wrote Thursday (June 12). “For SMBs seeking to build trust with international customers or suppliers, the ability to pay — or be paid — nearly instantly confers a tangible advantage. Fast money fosters goodwill.”
A technological advance that improves money movement and transparency includes ISO 20022, which delivers a universal messaging standard as banks and payment systems communicate with one another; the higher level of granular detail added to those messages moves entities to real-time processing.
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