Lissele Pratt shortlisted for Young Businesswoman of the Year 2022

Lissele Pratt selected finalist for the Young Businesswoman of the Year 2022 at the Great British Businesswoman Awards

Lissele Pratt, Co-Founder and COO at Capitalixe, was shortlisted for “Young Businesswoman of the Year” at the Great British Businesswoman Awards 2022.

This is one of the most prestigious awards in the business world, and being a finalist is a testament to Lissele’s exceptional achievements. Her nomination is a recognition of her hard work and determination, and a validation of the impact she has made in the business world. Lissele’s profile has been previously recognised with titles like Forbes 30 under 30, Techround 29 under 29, Women in Finance Awards Finalist, and others.

Her dedication and hard work in the business world have earned her recognition and praise from industry experts and peers. With her innovative ideas and strategic thinking, she has made a significant impact in her field and established herself as a successful businesswoman. 

Lissele’s journey as a young entrepreneur began when she identified a gap in the market and founded her own company at just 23. Since then, she has been on a mission to disrupt the industry and bring positive change. Under her leadership, Capitalixe has grown rapidly and now operates globally, serving underserved industries with innovative banking and payment solutions. 

Lissele’s unwavering commitment to excellence and her passion for empowering young women in business have also made her a role model for many. She is a strong advocate for diversity and equality in the workplace and has created a lot of awareness around these values through speaking engagements and featured articles in leading publications such as Entrepreneur, The Fintech Times, Finextra, Fintech Futures, among others.  

 

Young Businesswoman of the Year

In this digital era, youthful business leaders are tech-savvy, socially aware game-changers who bring an audacious energy to the business landscape, sparking fresh competition and imaginative concepts. 

Nominees for the “Young Businesswoman of the Year” award, who must be 30 years or younger by July 19th, harnessed these qualities to attain a remarkable level of business achievement at a young age. Their tale will embody grit and resolve, highlighting instances of grasped opportunity and nimble reactions to the numerous challenges faced by those driven to succeed. 

Held last Thursday evening, 26th January, the Great British Businesswoman Awards has brought together the 2022 cohort of finalists, judges, partners and special guests to recognise, celebrate and support women in business, champion their peers and advocates, and help foster the next generation of female business leaders. 

Lissele Pratt was shortlisted alongside talented women in business such as Rachel Thomas, Natalie Porter, Jade Cohen & Brittany Harris, Millie Goodwin, Chiara Macarti Speranza, Nipuni Karunaratne, Lucie Rowley, Megan Gamble, and Laura Cooper-Jackson, who ultimately took home the award. 

The awards took place for the first time virtually last year, but the organisers made the event bigger and better this year by holding it in person at the De Vere Connaught Rooms in London. While Lissele was in Thailand and could not attend, she was well-represented by her team at the ceremony. 

Capitalixe team at the Great British Businesswoman Awards ceremony 2022
Capitalixe team at the Great British Businesswoman Awards ceremony 2022 (left to right): Elena Kovacheva, Caroline Moreno and Daniah Hafez.

 

About the Awards 

The Great British Businesswoman Awards is an annual celebration that recognises the accomplishments of women in the business world. The event gathers prominent business leaders, entrepreneurs, and industry experts to acknowledge the achievements of female business professionals. 

This year, 160 women have been selected as finalists for the second edition of the awards, including categories such as Construction Businesswoman, Social Enterprise Businesswoman, and Diversity Initiative of the Year. One of these finalists will be named the Great British Businesswoman of the Year, a title won last year by Leena Nair from Unilever. 

The awards were established to highlight the inspiring female innovators and leaders in various industries. Despite this recognition, the statistics still indicate a disparity between the number of men and women in top corporate positions. 

Studies estimate that if women held equal representation in leading businesses, it could add £250 billion to the UK economy. The awards aim to play a role in promoting the significance of having more women in prominent corporate roles, ultimately tapping into that untapped potential. 

“Celebrating and supporting women in business is not just for other women – if we want to see more women leaders in business, it will be strong collaboration between us all that achieves it. We’ve created these awards to reflect that, with categories honouring male advocates, corporate initiatives and teams that are empowering business women and championing equality and diversity”, said awards founder Francesca James.

Finalists and winners are encouraged to continue their involvement with the program after the awards ceremony by joining the growing alumni network, where they can connect with previous participants, learn, and exchange ideas.

Virtual IBANs: Removing Friction in Cross-Border Payments

As a high-risk business owner, it can often feel like you’re swimming against the tide when it comes to getting approved for a high-risk merchant account. You know that you have a great product or service, but it can be difficult to find a payment processor willing to take on the risk associated with your business.

One of the biggest hurdles you’ll face is finding a way to accept and receive international payments. If your business relies on cross-border sales, you know that accepting payments from anywhere in the world is crucial.

But what if there was a way to get around this problem?

Introducing virtual IBANsIn this guide, we’re going to take a look at what they are, how they work, and how you can use them to remove friction from your cross-border payments.

Let’s get started.

What is a virtual IBAN?

A virtual IBAN is a payment method that allows you to receive cross-border payments without the need for a traditional bank account. Instead of using a physical bank account, you’ll be able to generate a unique IBAN (International Bank Account Number) that can be used to receive payments from anywhere in the world.

Virtual IBANs offer a number of advantages for high-risk businesses, including:

  • Reduced fraud risk: Virtual IBANs can be used to receive payments from anywhere in the world, which means that you’re not as susceptible to fraud.
  • Lower costs: There are no monthly fees or minimum balance requirements associated with virtual IBANs.
  • Faster payments: Virtual IBANs allow you to receive payments faster than traditional bank accounts.
  • Greater flexibility: You can generate as many virtual IBANs as you need, which gives you the flexibility to receive payments from multiple countries.

Let’s say you own an online gambling company and want to offer your customers the ability to pay in Euros. Traditionally, you would need to open a bank account in Europe in order to receive payments. But with a virtual IBAN, you can generate a unique IBAN that can be used to receive payments from anywhere in the world. This means that you can avoid the hassle and expense of opening a bank account in Europe and receive payments faster than if you were using a traditional bank account.

How virtual IBANs work

Virtual IBANs work by routing payments through the SWIFT network. SWIFT is a global network connecting banks and financial institutions worldwide. When you receive a payment from a customer, the funds are first sent to a virtual account that is linked to your virtual IBAN. From there, the funds are transferred to your real bank account via the SWIFT network. The whole process is automated, which means that you don’t have to worry about manually transferring funds from your virtual account to your real bank account.

The Friction: Explained

According to SWIFT, 2%-5% of payments are subject to an inquiry or investigation, leading to a delay before payment can be completed.

The main reason for this is that traditional cross-border payments can be slow and inefficient. When you send a payment from one country to another, the funds have to be converted into the local currency, which can take days. And if there are any errors or discrepancies, the payment can be delayed even further.

Some additional issues with traditional cross-border payments include:

  • High fees: Banks typically charge high fees for cross-border payments, which can eat into your profits.
  • Long payment terms: Payment terms can be as long as 30 days, which can put a strain on your cash flow.
  • Complex documentation: The paperwork and documentation required for cross-border payments can be complex and time-consuming.

The Solution:

This is where virtual IBANs can help. By routing payments through the SWIFT network, virtual IBANs can help to speed up the payment process and reduce the risk of delays and errors.

In addition, virtual IBANs offer greater transparency and visibility into the payment process. With a traditional bank account, you might be unable to track a payment’s status or see where it’s being held up. But with a virtual IBAN, you can see exactly where the payment is at every step of the way. This transparency can help reduce the frustration of waiting for a cross-border payment to arrive.

When it comes to rules and regulations, cross-border payments can be a minefield. Different countries have different laws and regulations, which can make it difficult to comply with all of them. This is another area where virtual IBANs can help. Because virtual IBANs are not tied to any one country, they offer greater flexibility when it comes to compliance. With a virtual IBAN, you can choose the jurisdiction that best suits your needs. For example, you might choose a jurisdiction with more favourable tax laws or one that offers greater protection from fraud.

Virtual IBANs can also help to reduce the risk of incorrect data fields, as the fields are generated automatically. Let’s say you own a forex brokerage that allows your clients to trade in multiple currencies. With a traditional bank account, you must manually enter the client’s currency and amount into the relevant fields. But with a virtual IBAN, all this information is generated automatically, reducing the risk of errors.

Final Thoughts

As more businesses enter the global market, the need for virtual IBANs will continue to grow.

Gone are the days when outdated banking infrastructure could slow down or even stop global commerce. The modern global financial ecosystem is complex and ever-changing. 

As businesses utilise virtual IBANs to make and receive payments, they are future-proofing their cross-border payment options and gaining a competitive advantage.

At Capitalixe, we work with leading banks and financial institutions to provide our clients with the best possible rates and terms for their cross-border payments. From virtual IBANs to blockchain-based solutions, we are constantly innovating to make cross-border payments faster, easier and more efficient.

If you’re looking for a better way to make cross-border payments, we can help. 

Get in touch today to find out more about our services.

 

 Multi-Currency IBANs: How They Can Help Your Business Grow

The first thing that you do when you learn about a business or have to deal with it is that you look it up. The entire world is online and so are businesses. When you set up a business online, there is always a possibility of finding clients that are not necessarily from your country. Now as foolish as it may sound to have to give up a client because of geographical locations, it is something you can easily evade by being smart and opening an offshore account that accepts multiple currencies.

Gone are the days when offshore accounts were opened to launder money and evade taxes.  They are now a way for businesses to legally access accounts that have more security, work with various currencies and get access to important payment systems carried out globally.

The Concept and Origin of Multi-Currency IBANs

A multi-currency IBAN account is an international bank account that diverts transactions in diverse currencies into one principal account and currency.

Back in the day, every country in Europe had its own specific way of organizing payment information while conducting international bank transactions. This diversity in the systems left room for a lot of mistakes and errors. In 2014, the European Union got together and harmonized its method of identifying bank information which is now known as the International Bank Account Transfer Number (IBAN). The IBAN system is now a part of other countries too, that are not limited to the EU. Virtual IBAN accounts are becoming more common by the day, as companies and individuals that have proper documentation, can open IBAN accounts online, without even stepping into an IBAN-favoring country. The rise in virtual bank accounts has led to the sudden meddling of borders in finance, globally. The clients can reside in one country and do business in other, while their bank account is located elsewhere.

It is common to sell products and services in several markets in a progressively globalized and multifaceted world. Multi-currency IBANs can be very fruitful for these businesses as they allow the merchants to collect international payments in diverse currencies and stock them in one centralized account.  This allows business owners to make the world their marketplace and benefit from the transactions on a global level.

Benefits of Virtual Multi-Currency IBANs

There are multiple ways by which multi-currency IBANs can help a business. Let us take a look at them:

  1. Avoid Currency Conversion Tools- When you are paid in a different currency, the internal currency conversion tools make a significant dent in your income. Multi-currency IBANs enable you to keep different payment gateways as they combine all your international payments in a single account. They allow you to accept and offer online payments in several foreign currencies. This way you can receive payments in multiple currencies from the various countries you deal in. The money received in the particular currency stays as is, with a mere fee for foreign exchange.

 

  1. Cost-effectiveness- If companies use multi-currency IBAN accounts to set up numerous virtual accounts, like physical accounts, they can exclude the substantial foreign exchange (FX) and transfer expenses linked with altering each payment compared to typical bank accounts. Not just the purchases, they make it very convenient for the companies to deal with settlements. Using multi-currency IBANs lessen the time it takes to process payments, helps with making payments in bulk, and provides prospects to trade with different countries.

 

  1. Extra Account Security- One of the most important reasons for keeping money in the bank is Security. It is imperative to keep the financial documents of an organization safe. Stored in redundant, encrypted cloud servers, multi-currency IBANs are safer and less likely to be misrepresented. They have very strict rules for KYC (Know Your Customer) and money laundering. Secure IBANs help provide various payments for foreign exchange and offer a solution to holding different accounts that may or may not be safe.

 

  1. Global Yet Local- Multi-currency IBAN accounts empower you to trade in any part of the world on your own terms. Your currency is the language you speak and it hardly leaves scope for any confusion. You get what you charge and there is immense clarity between the trader and the buyer, despite the regional difference. These accounts make you feel like you are trading locally.

 

  1. Insights on Spending- You never know where you would strike gold when you deal in different countries. The profits from one country may be much higher than in another. The multi-currency IBANs enable you to record and observe profits on a currency-by-currency basis and from that, you can ascertain how much you need to spend in a country, according to the returns you would get.

 

  1. No Multiple Relationships- Payment businesses using a virtual IBAN can access multi-currency, multi-jurisdictional banking without needing multiple bank relationships, as all your money would stay in a single account, and you would not have to deal with different banks pressurizing you to be on cordial terms with them, giving you more time to focus on the services you are looking forward to providing in your business.

 

  1. Saves Time- When you have a multi-currency IBAN account, you save a lot of time as you have to no longer worry about managing the reductions that are bound to happen when you are dealing with a different currency. Without a multi-currency IBAN account, you are bound to waste a ton of time while figuring out the deductions, but with it, you have one less item to worry about on your plate.

 

  1. Transactional Fees- International payments often require companies to suffer by cutting out a significant chunk from the payment received, as a part of transactional fees. Virtual multi-currency IBANs deal with companies akin to a local account. You save a lot of money by not having to pay for services you will not be using, for example, insurance, credit cards, etc. All this hassle can be easily avoided by keeping multi-currency IBAN accounts so that a more affordable getaway is created for all the companies involved in the transaction.

 

Parting Note

Multicurrency IBANs are a great way of taking your business to a global level. The world is getting smaller by the day through the power of the internet and it is for this reason that multicurrency IBAN accounts are gaining so much popularity, especially in developing countries. When a business from a developing country gets paid by a business from a developed country, the difference in the currency is significant and it can help you a lot, to grow your business and to make a mark online. Multicurrency IBAN accounts offer a hassle-free solution to most of the problems that are likely to arise when dealing with an international business or a client. They keep your money safe and help you avoid unnecessary expenses and thrive in an economy on your own terms.

 Contact Us For Banking Help

 At Capitalixe, we specialize in helping our clients who are often deemed as “high risk” find the perfect banking and payment solution for their needs. We do this by leveraging our network of over 50+ financial institutions, EMI’s and banks worldwide. Our goal is to help save you time and take the pain of finding trustworthy and suitable solutions away from you.   

Feel free to reach out to us for a complimentary consultation. We will be more than happy to help you. 

What Is Correspondent Banking and How Does It Work?

So what is correspondent banking?

A correspondent bank is a financial institution that offers services to another financial institution, usually in a different nation. It operates as a middleman or agent for another bank, arranging wire transfers, performing business transactions, receiving deposits, and gathering documentation.

Domestic banks will most likely use correspondent banks to service transactions that originate or are completed in other countries. In addition, domestic banks use correspondent banks to access international financial markets and serve international clients without having to operate branches abroad.

What Is a Correspondent Bank?

A correspondent bank is a bank in one nation permitted to provide services to a bank or financial institution in another country. Currency exchange, processing business transactions and trade documentation, and money transfers are the most frequent services provided by a correspondent bank.

How Does a Correspondent Bank Operate?

Correspondent banking is based on a deal between a foreign and a domestic bank to open a correspondent account, also known as a Vostro or Nostro account, at one bank to benefit the other. Correspondent banking generally includes the concept of reciprocal accounts that link two banks. These accounts are set up so that a domestic bank can make payments or money transfers on behalf of a foreign bank.

These correspondent accounts allow banks to manage international financial transactions for their customers that involve foreign currency exchange, such as those that often occur between an exporting business in one country and an importer in another.

What does the process look like?

A bank customer in one country must pay for goods from another country’s suppliers. The customer’s domestic bank determines the necessary foreign currency exchange transaction to permit suitable payment in the seller’s currency.

It deducts the necessary amount from the customer’s account. Then, it notifies its correspondent bank in the supplier’s nation to pay the matching amount to the supplier from the domestic bank’s correspondent account with the foreign bank in the supplier’s currency.

Third-party banks are referred to as correspondent banks. They bridge the gap between various financial institutions. As a result, they provide Treasury services between sending and receiving banks, particularly those located in different countries—for example,

  • exchange of currencies
  • make sure everything is in order
  • settlement
  • transfer of funds by wire
  • transfer of money

When clients travel abroad, correspondent banks may act as agents to handle local transactions for them. For example, correspondent banks can receive deposits, process documents, and act as money transfer agents locally.

What are Nostro and Vostro Accounts?

Nostro and Vostro accounts are the accounts held between correspondent banks and the banks for which they offer services. The holding bank refers to an account held for another bank as a Nostro account. The counterparty bank refers to the same account as a Vostro account, which means “your account on our records.” Generally, both banks in a correspondent relationship maintain accounts for each other to track debits and credits between them.

Correspondent banks are an essential aspect of the financial industry since they allow domestic banks to continue to operate when they can’t create branches in another country. For example, a small local bank with clients in many countries can form a partnership with a correspondent bank to suit its clients’ foreign needs. They have access to the international financial market as a result of this. As a result, the correspondent bank will charge a fee for this service, usually passed on to the customer by the local bank.

Nostro vs. Vostro Account

The terms “Nostro” and “Vostro” refer to the same bank account. The phrases are used when one bank has money on deposit with another bank, usually in the context of international trade or other financial operations.

Both banks in the partnership must keep track of the amount of money held by one on behalf of the other. The phrases Nostro and Vostro are used to distinguish between each bank’s two sets of accounting records.

The Latin words Nostro and Vostro are variations on the words “ours” and “yours,” respectively. The origins of modern retail banking may be traced back to the 13th and 14th centuries in Italy, where depositors and retail banks kept track of their account balances. The depositing customer held the Nostro ledger, while the bank kept the Vostro ledger.

Account Nostro

A Nostro account is a term used by Bank A to refer to Bank B’s “our” account. Nostro is a colloquial expression for “our money on deposit at your bank.”

The Nostro account records a bank’s money on deposit with another bank. These accounts are frequently used to streamline commerce and foreign exchange settlements. In contrast to regular demand deposit bank accounts, Nostro accounts are usually held by financial institutions and are denominated in foreign currencies.

Account Vostro

Bank B refers to the money on deposit at Bank A as “vostro.” The word “vostro” means “your money” and refers to “your money on deposit at our bank.” A Vostro account is similar to any other bank account. The account is a record of money due to or kept by a third party, most commonly another bank, although it can also be a firm or an individual.

A bank in the United Kingdom or the United States holds a Vostro account on behalf of a foreign bank. The money deposition happens in the currency of the country where the Vostro account is present.

Example of Nostro vs. Vostro

Consider the following scenario. GTBank, a Nigerian bank, receives a large amount of money in the form of remittances from its customers in the United States. Because GTBank does not have a physical presence in the United States, it enters into a contract with Citibank to have a U.S. dollar account opened for it remotely. One will place money received from American clients and businesses sending money to GTBank account holders in Nigeria in GTBank’s Citibank account.

Citibank will send the funds to GTBank’s US dollar account in Nigeria via SWIFT. The Society for Worldwide Interbank Financial Telecommunications, or SWIFT, is a member-owned cooperative. It provides its members with safe and secure financial transactions. Following the completion of the transfer, GTBank receives the dollar-denominated monies, translates them to the local currency (the naira), and puts them into the receivers’ local accounts.

GTBank’s Citibank U.S. dollar account is a Nostro account in GTBank’s eyes. In addition, Citibank maintains a Vostro account for GTBank in US currency.

Cash assets are Nostro accounts with negative balances. On the other hand, Vostro accounts with a credit balance are termed liabilities. Computerized accounting makes it simple to reconcile Nostro and Vostro accounts by simply entering “+” or “-” indications in the respective accounting systems of the banks.

How do International Wire Transfers work for Correspondent banks?

International wire transfers frequently happen between banks with no prior financial relationship. A bank in San Francisco, for example, that receives instructions to wire funds to a bank in Japan cannot do so without first establishing a working relationship with the receiving bank.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) network handles the majority of international wire transfers. The originating bank does not have a functioning connection with the destination bank. So, it can search the SWIFT network for a correspondent bank that does. Then, the originating bank sends the transferred funds to its Nostro account maintained at the correspondent bank after selecting one with agreements with both sides of the transfer.

Intermediary Bank vs. Correspondent Bank

Although there are some parallels between the correspondent and intermediate banks, such as the fact that they both function as third parties for other banks, there is a significant distinction between them. An intermediary bank completes transactions involving a single currency, whereas correspondent banks generally handle transactions involving numerous currencies. They’re essential for domestic banks that aren’t big enough to manage these transactions.

An Overview of Correspondent vs. Intermediary Banks

Beneficiary banks utilize correspondent and intermediate banks as third-party banks to enable international fund transfers and transaction settlements. The beneficiary bank is the receiving bank where a person or company has an account.

A person or corporation would have an account with an issuing bank in both circumstances. The procedure of transmitting funds from the issuing bank to the beneficiary bank is then completed by that bank using a correspondent or intermediary bank.

There are inconsistencies in the explanation of correspondent vs. intermediary banks. For example, correspondent banks can be separate from intermediary banks, or they can be a form of the intermediary bank that is indistinguishable from intermediary banks. It all depends on where the account holder is located in the world.

Banks as Correspondents

A correspondent bank acts as a middleman between the issuing and receiving banks, providing services on behalf of the latter. Domestic banks frequently use correspondent banks as their agent abroad to complete transactions that begin or end in another country. On behalf of the domestic bank, the correspondent bank can carry out a variety of transactions. These services include completing wire transfers, taking deposits, acting as transfer agents, and arranging papers for another bank.

Banks that act as intermediaries

The role of intermediary banks is comparable to that of correspondent banks. An intermediary bank is a link between an issuing and receiving bank, which may be located in separate countries. There is a frequent requirement for an intermediary bank when international wire transfers take place between two banks. This is especially when both banks are in different countries with no prior financial relationship.

Important distinctions

There is sometimes a distinction between the unique functions that intermediary and correspondent banks play in the United States and other nations.

One distinction is that correspondent banks are frequently in charge of multi-currency transactions. For example, a correspondent bank would be liable for all transactions from the US dollar to the Danish Krone. This is if the person initiating the transfer is based in the United States. Moreover, it’s applicable while he is sending money to someone in Denmark.

Correspondent banks are often located in the nations where the two currencies are local. However, a bank may be based in a separate country occasionally.

Intermediary banks transfer cash to complete international transactions, but only for one currency. A domestic bank is usually too small to handle international payments in this situation. Therefore, it turns into an intermediary bank.

Particular Points to Consider

All banks accept wire transfers, an electronic method of delivering money to another person or entity. However, international wire transfers are more expensive and complicated to complete.

Intermediary banks deal in foreign transactions in particular parts of the world, such as Australia or EU member countries. There is no distinction whatsoever between the correspondent and intermediate banks.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) network handles the majority of international wire transfers. Suppose the issuing and receiving banks do not have a working relationship. In that case, the originating bank can use the SWIFT network. It will help them to find a correspondent or intermediary bank that has agreements with both financial institutions.

Contact Capitalixe for correspondent banking solutions

At Capitalixe, we specialise in helping small, offshore, and emerging market banks obtain payment and banking solutions.

Our job is to match your company with the most appropriate and beneficial financial solution from our extensive network of over 100+ reputable payment and banking providers we work with worldwide.

By understanding your business goals, payment requirements, and market positioning, we take the time-consuming pain away of going to market and provide you with the solutions that are best suited to your needs.

The best part of all is our services are free of charge.

Feel free to reach out to us for a complimentary consultation. We will be more than happy to help you.

 

By Lissele Pratt

COO & Co-founder of Capitalixe

The Future of Cross-Border Payments: What Will it Look Like?

The cross-border payments landscape is constantly evolving. New technologies and approaches are always emerging, making it difficult to predict what the future will hold. However, some clear trends suggest where the industry is headed.

So, what are these trends? And how will they shape the future of cross-border payments? We’ve created a complete guide to answer these questions.

In this guide, you’ll learn about:

  • What are cross-border payments?
  • How cross-border payments work today
  • The benefits of cross-border payments
  • The future of cross-border payments
  • What is SWIFT and how can it help?

Read on to find out everything you need to know about the future of cross-border payments.

What are cross-border payments?

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Cross-border payments are electronic money transfers between two countries. The majority of these payments consist of a sender and receiver who do not share a common ledger, and the transactions between the two countries will involve a series of intermediary transactions.

They can be used for a variety of purposes, including:

  • Paying suppliers in other countries
  • Receiving payments from customers in other countries
  • Transferring money to friends and family members in other countries
  • Making investments in foreign companies or securities

Let’s say you’re a CFD broker. You have clients in the UK, Europe, and the US. To settle trades with these clients, you need to be able to send and receive payments in all three currencies. 

Types of Cross-Border Payments 

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SWIFT

The society for Worldwide Interbank Financial Telecommunication (SWIFT) is a system that allows for cross-border payments to be made in any currency via a swift code. It’s used by businesses all over the world and is considered to be extremely secure. 

SEPA

The single Euro payments Area (SEPA) is a system that allows for cross-border payments to be made in Euros. It’s used by businesses in the European Union (EU) and European Economic Area (EEA).

Credit card payments

These are cross-border wire transfers made with a credit or debit card. 

Alternative methods of payments

E-wallets, apps, and cryptocurrencies. These are all new methods of making cross-border payments that are becoming more popular.

How cross-border payments work today

Cross-border payment options are typically made through banks or other financial institutions. The sender will initiate a transfer through their bank, and the recipient’s bank will receive the payment and credit it to their account.

In most cases, cross-border payments take several days to complete. This is because the banks involved need to convert the currency, process the payment, and then send it through the international banking network.

The process can be further complicated by things like different time zones, holidays, and weekends. All of these factors can delay payment and add to the overall cost.

The benefits of cross-border payments

Despite the challenges, there are a number of reasons why you might need to make cross-border payments. In many cases, they offer a number of advantages over traditional payment services. Some of the benefits include:

Achieve a greater ROI

With cross-border payments, businesses can save on operational costs and improve their bottom line. That’s because they can take advantage of better foreign exchange rates and avoid costly bank fees.

Businesses can also save on costs associated with having a local presence in another country such as rent, salaries, and other overhead costs. Outsourcing services from emerging markets can also be a cost-effective way to get the same quality of work without having to pay high prices.

Suppose you’re an online gaming company that makes most of its revenue in US dollars. However, you have servers and other operational costs in Euros. With a cross-border payment solution, you can get the best exchange rate for your transactions and save money on every transaction. This can add up to significant savings over time and improve your bottom line.

Increase the number of buyers and affiliates

With cross-border payments, your high-risk business can expand its customer base and tap into new markets. That’s because you’ll be able to accept payments from buyers in other countries.

For example, let’s say you run an e-commerce store that sells products to customers in the United States. With a cross-border payment solution, you could start selling to customers in Europe and Asia as well. This would open up a whole new revenue stream for your business.

Comply with international tax and regulations

Cross-border payments can also help businesses stay compliant with international tax and regulatory requirements. This is because they provide a paper trail of all transactions. This can be helpful in the event of an audit or investigation.

For high-risk businesses, cross-border payments can also offer a number of other benefits. For example, they can help businesses avoid chargebacks and fraud.

The future of cross-border payments 

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Despite the benefits, there are still a number of challenges with cross-border payments. 

But the good news is that things are changing. With the advent of new technologies like blockchain, the future of cross-border payments looks promising.

Here are some of the ways that cross-border payments are expected to change in the future:

Cross-Border Payment methods will continue to evolve

There’s no doubt that payment methods will continue to evolve and in turn enhance cross border payments. In the past, cross-border payments were typically made through banks or other financial institutions. But this is changing. SWIFT GPI, SEPA Instant, and other innovations are making it possible to make cross-border payments in real-time.

Cross-Border Payments will be instant

One of the biggest changes to cross-border payments is that they will become instant. This is possible with the use of blockchain technology. With blockchain, payments can be processed in real-time, without the need for intermediaries.

Suppose you’re a high-risk business. In the past, you may have had to wait days or even weeks for your payments to clear. But with blockchain, your payments will be processed immediately, giving you the working capital you need to keep your business running smoothly.

Cross-Border Payments will offer differentiating features

Another way that cross-border payments are expected to change is that they will offer differentiating features. This is because the market is becoming increasingly competitive. As a result, businesses are looking for ways to stand out from the crowd.

One way that businesses are doing this is by offering unique features that appeal to specific niches. For example, some cross-border payment solutions are designed for businesses that need to send large amounts of money. Others are designed for businesses that need to make frequent payments. 

Each of these solutions offers differentiating features that appeal to a specific group of customers. This is expected to continue in the future as more and more businesses enter the market.

Cross-Border Payments will be more transparent

In the past, there’s been a lack of transparency with these payments. However, cross-border payments are evolving and APIs are playing a big role in this.

With APIs, businesses will be able to connect to a network of central bank and financial institutions. This will allow businesses to compare prices and find the best deals. It will also allow businesses to track their payments and receive notifications when the funds have been received. This increased transparency will help businesses to avoid hidden fees and charges.

Cross-Border Payments will meet every business’s needs

In the past, cross-border payments were often seen as a niche product. But this is changing. As the world becomes more connected, there is a growing need for this solution. 

This is because businesses are increasingly doing business with partners in different countries. By tracking international payments with a single, ubiquitous standard, businesses can streamline their operations and save money. Plus, transparency on fees, remittance and FX information will help businesses to avoid hidden charges and improve the customer experience.

Final Thoughts

The future of cross-border payments looks promising. With the advent of new technologies, the process is becoming more efficient and transparent. This means that businesses will be able to save money and conduct transactions more quickly and easily.

SWIFT payments Can Help Your Medium or High-Risk Business:

One of the most popular methods for making cross-border payments is SWIFT. 

SWIFT is a global network that connects banks and financial institutions. It allows businesses to send and receive money quickly and securely.

SWIFT is an ideal solution for businesses that need to make large or frequent cross-border payments.

At Capitalixe, we offer SWIFT-enabled cross-border payment solutions that can help your medium to high-risk business save time and money. It’s designed for businesses of all sizes and can be customised to meet your needs.

Interested in learning more about our solutions? Contact us today!

How do virtual IBANs enhance the growth of B2B cross-border digital businesses?

How do virtual IBANs enhance the growth of B2B cross-border digital business?

Digital merchants and online marketplaces are here to stay and are rapidly expanding. However, having a solid payment infrastructure is critical to their success.

Businesses must provide secure payment choices to their customers while balancing compliance and regulatory constraints. Adding virtual IBAN to your financial toolset streamlines and simplifies the process in this case. A virtual international banking account number (virtual IBAN) is a bank-issued reference number that enables payments to be routed to a (non-virtual) IBAN/bank account.

Virtual IBANs are addressing many of the inefficiencies between traditional banks and internet payments by modernizing transaction processes. In addition, they are assisting merchants in untangling the difficulties of conventional worldwide banking connections and overhauling their payment systems.

What exactly is a cross-border payment?

Cross-border payments occur when the payee and transaction recipient are located in different countries. Individuals, businesses, and financial institutions wanting to move payments across borders can use this service. International merchants must be able to accept payments in all of the countries they are targeting.

We developed a guide about cross-border payments so you can learn more about the global payments ecosystem and how to grow your business by choosing the proper payment partner for your international payments.

How to send money internationally?

To conduct an international bank transfer, you’ll need the recipient’s information, including their International Bank Account Number (IBAN) and Bank Identifier Code (BIC). However, a consumer making a payment to an merchants’ site in another nation will have to do very little to complete the transaction because the merchant and their payment service provider will handle most of the work.

Merchants can make SWIFT payments to their consumers or other businesses. In addition, Visa Direct and Mastercard Send will likely become more extensively used in the future, enabling secure and quick payments to be sent directly to a card.

How does virtual IBAN work for B2B trading across borders?

Accepting and sending foreign B2B payments might result in massive transactional fees for businesses. Virtual IBANs provide companies with the same features as a standard settlement account but without the costs of opening and maintaining a physical account.

Many traditional suppliers will try to sell new customers comprehensive packages that include services they don’t need, such as credit cards, worldwide payment services, and insurance. As a result, the entire process may become a significant burden for businesses, requiring them to devote a substantial amount of time and attention to a straightforward procedure.

A virtual bank account with IBAN provides payment services without the expense and complexity of a traditional commercial bank account. The usage of virtual IBAN accounts further reduces potential administrative costs. The entire system strives to simplify the reconciliation process, allowing enterprises to conduct business with ease worldwide.

FX and payments companies, as well as their consumers, can benefit from virtual IBAN accounts. FX and payments companies can utilize these accounts to manage a master IBAN account from which they can establish and allocate segregated virtual IBAN accounts to each of their customers, making settlement and reconciliation easier.

A virtual IBAN or virtual bank account with IBANis a multi-currency, multi-jurisdictional banking solution for payments businesses that eliminates the need for several banking partnerships.

Below listed are some of the primary reasons that you should know about:

Changing B2B Requirements

Firms are conducting business abroad and in the digital industry are constantly seeking methods to improve their cross-border B2B payment procedures to be competitive and stay ahead of their competitors in their target market niche.

The issue in this complex undertaking is finding efficient and available solutions and adequately executing them to perform flawlessly for all parties involved, including core business, partners, suppliers, and customers.

Determining which technologies are most suited to the payment demands of specific organizations and their international partners is critical to helping them survive and grow once the present worldwide epidemic stops.

Closing the Gap in Technology

Virtual IBANs, like harmonizing international financial regulatory systems, technically bridge barriers between enterprises and markets. Virtual IBANs in B2B cross-border commerce close this gap and reduce the capital overlay needs familiar with traditional banking solutions.

This is mainly due to business and payments’ increasingly global and borderless nature. However, there are also administrative efficiencies to consider (which are growing by the day) and the enhanced capital allocation that such systems enable. This is essentially the basis behind Visa’s new B2B connect service.

Regardless of the size or location of your company, there are several growth prospects outside of your current market. Visa’s job as a payments network is to handle payments between banks on behalf of their buyers and sellers.

Global Financial Regulatory Harmonization

When dealing with various financial regulatory systems worldwide, the most significant hidden benefit of virtual IBANs in B2B cross-border payments comes into play.

Because virtual IBANserves as a single clearing account for international transactions, there is no need for a company to maintain a banking relationship with a local bank to conduct business with local companies.

Furthermore, domestic industries in that country are authorized to transmit payments to virtualIBAN accounts. Therefore, that country’s rules and regulatory regimes have no bearing on the company’s capacity to do business.

In other words, corporations do not have to be concerned about local events and can instead concentrate on the big picture to grow their business.

What are the different types of International or cross-border transactions?

Cross-border payments include credit card transactions, APMs, and bank transfers. So naturally, customers prefer to pay most conveniently for them. However, they also want customized options and assurance that their payment information is secure and managed well. As a result, merchants must cover all bases and provide several payment options for international customers.

eWallet

An eWallet, sometimes known as a digital wallet, is a software-based electronic APM that enables clients to pay for online and in-store transactions. eWallets, which are commonly available as apps for smart devices, allow users to safely keep their preferred payment cards so that they may pay for goods and services. Alipay, Apple Pay, Google Pay, Neteller, and Paypal, are just a few examples of popular eWallets.

Consumers can use some eWallets to transact in several currencies and conduct overseas orders. Although you cannot term wallet-to-wallet typeas proper cross-border transactions, they make the entire process easier overall. The process is not classified as a cross-border payment until the funds are withdrawn from the eWallet and transferred to the merchant’s bank account.

Transfers between banks

Another long-standing method of making a cross-border payment is through international bank transfers. Most larger banks will keep a range of currencies on hand, but they will only be able to accommodate a few at a time.

As a result, when a UK customer wants to send money to a place where they don’t have the currency in stock, they’ll have to rely on their international banking associates to complete the payment. Smaller banks frequently lack foreign currency reserves. Therefore they rely on large banks to handle cross-border transactions.

This is simply a glimpse of cross-border payment processing; many more parties could be involved, causing the transaction to be delayed. SWIFT GPI is an attempt to speed up cross-border payment operations, which we will examine further below.

Payments by credit card

Credit cards are a popular choice for many people when making cross-border payments. Consumers submit their credit card information and wait for the transaction to be validated. However, there’s more going on behind the scenes. Because they must convert between two distinct currencies, cross-border payments necessitate greater effort from the credit card networks and acquiring banks involved. In addition, increased fees are transferred down the payment chain due to the increased workload.

Contact Capitalixe for custom banking solutions

At Capitalixe, we specialise in helping medium to high-risk clients obtain payments and banking solutions.

Our job is to match your company with the most appropriate and beneficial financial solution from our extensive network of over 100+ reputable payments and banking providers we work with.

By understanding your business goals, payments requirements, and market positioning, we take the time-consuming pain away of going to market and provide you with the solutions that are best suited to your needs.

Feel free to reach out to us for a complimentary consultation. We will be more than happy to help you.