In the "Insider Insights"series, we explore the intricacies of cross-border transactions through different lenses. What are some key challenges and future outlook that businesses should be aware of when navigating the dynamic foreign exchange (FX) and payments landscape?

Overcoming Barriers: Key Challenges in Cross-Border Transactions

Businesses often face multi-layered challenges in cross-border transactions. Jeremy Sng, General Manager of Corporate Finance & Strategy at M-DAQ Global, notes: “As a start, businesses grapple with the collection and remittance of funds across international offices. Building on to that hurdle is ensuring the ease of use through a unified platform accessible via mobile or web. Speed, efficiency, and competitive costs for both transfers and FX rates constitute the third level of challenge. Finally, businesses require API integration to enable instant transactions and enhanced risk management with transparent FX rates.”

The Shifting Terrain: Evolving Landscape & Future Outlook

Over the past few years, the dynamic payments landscape has witnessed significant shifts including more stringent compliance and regulatory requirements leading to increased costs. “Geopolitical factors, such as trade wars, have influenced payment flows, necessitating alternative trade corridors. The rise of fintech and non-bank financial players has also introduced a competitive yet cooperative ecosystem. Additionally, there is a growing demand for real-time payments, with businesses increasingly expecting T0 settlements”, as observed by Jeremy.

Looking ahead, it is predicted that there will be a continued emphasis on real-time payments and interoperability. “Businesses are demanding faster settlements and better cash-flow management. Transparency and cost reductions are also critical, with businesses seeking greater visibility into fees. Fintech players such as M-DAQ Global aim to address this by enhancing process efficiency and clarity in cross-border transactions. The rise of digital channels and the potential to reach unbanked populations through social commerce will also further shape the future”, concluded Jeremy.

Joining Forces to Co-create a World without Currency Borders

In the interconnected payments ecosystem, greater industry collaboration is crucial for innovation. For example, leveraging artificial intelligence in know-your-customer (KYC) processes which can save time and resources, requires the joint efforts of different ecosystem players. Enhancing interoperability by opening domestic payment systems across countries is another area for collaboration. Lastly, blockchain adoption which can improve transaction outcomes also requires the cooperation among various industry stakeholders.

For Jeremy, a "World without Currency Borders" means seamless interoperability and effortless remittance across countries and currencies. Transactions would be confirmed in seconds, incur minimal costs, and offer clear and certain exchange rates. This frictionless movement of currencies would benefit both consumers and businesses, marking a significant step forward in the global payments landscape.

As the cross-border FX and payments landscape continues to evolve, the key pillars of innovation, collaboration, and transparency remain. By addressing the challenges and embracing emerging developments, businesses can navigate this complex ecosystem with more ease. M-DAQ Global's commitment to leveraging technology and fostering partnerships underscores a future where the vision of a World without Currency Borders becomes a reality.

For more information on how M-DAQ Global supports businesses in seamless cross-border FX and payments, visit here: www.m-daq.com.

Keen to unlock more insights into cross-border FX and payments? Follow our M-TV LinkedIn Live series on M-DAQ Global LinkedIn page to gain perspectives from different industry experts in the ecosystem.