Where there’s cross-border commerce (eCommerce), there are cross-border payments. In this global economy, many potential customers are often based abroad. You shouldn’t miss out on international sales because your business can’t accept international payments. Although there are cross-border fees to consider for a start, the benefits of cross-border payments outweigh the challenges. So, why do businesses need to accept cross-border payments?
The Landscape of Cross-Border Payments in Africa
There has been a significant increase in cross-border payments in Africa – between countries in Africa and those outside Africa – due to increased migration and trade flow. In 2022, about 40 million Africans living outside their country of origin made about US$100.1bn in cross-border remittances through different channels. US$ 19.4 billion was sent intra-Africa, while remittances to sub-Saharan Africa were $53 billion. The top African countries with higher cross-border payments are Egypt, Nigeria, Morocco, South Africa, Kenya, Ghana, South Sudan, Mozambique, Rwanda, and Ethiopia.
While banks are still leading in the preferred channels of cross-border payments for businesses, FinTechs and digital cross-border payments are growing. In 2024, Africa’s total transaction value in Digital Payments is projected to reach US$195.50bn.
Benefits of cross-border payments to businesses
Here are some of the reasons why businesses need to accept cross-border payments:
1. Payment Flexibility: A wide range of payment options
Cross-border payments offer businesses flexibility in payment methods by diversifying the range of payment options available to their customers, including mobile money, digital wallets, QR Code instant payments, and more. This lets customers choose the most convenient and cost-effective method that fits their needs.
2. Speed of payment
Cross Border payments can use real-time digital payments that arrive in seconds, bringing clarity to cash management and allowing businesses to access funds instantly.
3. Improve customer experience
The more payment options customers have, the more likely they are to convert. So, offering more payment options will improve the customer experience, especially if they can pay using their local payment methods. It also removes the burden of foreign exchange fees.
4. Access to global markets and competitive advantage
Cross-border payments allow businesses to expand into international markets and reach new customers, suppliers, and partners. Businesses exploit the ability to transfer funds internationally instantly, allowing them to expand into new markets, build international supply chains and even hire global workers. They benefit from making payments just like a local enterprise, making businesses more attractive prospects for partners and customers.
5. Increased revenue and growth opportunities
Selling goods and services cross-border allows businesses to tap into new customers and growth opportunities. As a business, you’ll diversify your customer base, supplier base, and investment portfolio internationally while benefiting from various cross-border payment methods. This can help the business increase and diversify its revenue sources.
6. Cost savings
Costs for cross-border payment remain high, with the global average being 6.5% of transaction value, rising to 8.2% in some regions. However, some cross-border payment methods can be more cost-effective than others, allowing businesses to save money on transaction fees, currency exchange rates, and other costs associated with international trade.
7. Better payment security
One security glitch can be all it takes to destroy a business’s reputation. payment service providers (PSPs) like Cellulant include built-in security in payment processing, such as PCI DSS Level 1 security and payment compliance. This helps to make secure cross-border payments.
Conclusion: Try Cross-border payments with Cellulant
Adopting cross-border payments is not a mere option for modern businesses seeking sustained growth and competitiveness. Cross-border payments create significant opportunities for businesses to expand into new markets and grow revenue.
Integrate Cellulant’s payment platform into your business with cross-border payment services to simplify sending and receiving payments in different countries. With a single API integration, the platform provides a digital payments platform that runs an ecosystem of consumers, retailers, merchants, banks, mobile network operators, and governments. It is currently used by 2000+ businesses across 35 African countries and hosts 350+ Bank, MNO Wallet, and card Integrations to support cross-border payments. Talk to us.