The future of cross-border payment: Traditional vs digital
Submitted by: MyPressportal TeamAs the world of finance evolves into the digital age, businesses now have the luxury of choosing platforms that offer convenience and efficiency in managing their finances. Companies dealing with clients in other markets can opt for digital payment systems for cross-border transactions, which promote speed, safety and cost savings.
Africa is experiencing an increase in regional real-time payment infrastructure, enabling instant account-to-account transactions, and it is therefore critical to note the shifting tide of global remittances.
According to Ola Oyetayo, CEO at Verto, digital remittances are surpassing global cash-based remittances for the first time in history, with the trend paving the way for the emergence of new channels for cross-border transactions, particularly across Africa.
“PCMI’s The Changing Competitive Landscape in Global Money Movement report suggests that some of the largest remittance corridors have been witnessed intra-Africa, with as much as $19.4 billion being sent throughout the continent. The largest volume between countries sees over $1,3 billion being transferred between Cameroon and Nigeria, $1,2 billion between Niger and Nigeria, and $1 billion distributed between South Africa and Zimbabwe,” says Oyetayo.
This considerable transfer of capital between African countries has seen the continent being regarded as the most expensive global remittance market and has spurred the need for services that reduce costs, often contrary to those offered by traditional banks.
Despite traditional banks seeming like the default choice for many in business, the benefits of partnering with a single digital platform, such as Verto and others, provide several dividends, particularly for SMEs.
“Traditional banks often incur additional currency conversion fees, wire transfer charges, and slower processing times. In contrast, single digital platforms offer streamlined services specifically designed for international transactions,” adds Oyetayo.
“Here, customers can expect lower fees and more favourable exchange rates when compared to traditional banks, which often impose higher charges due to their more extensive infrastructure and intermediary involvement.”
Oyetayo explains that Verto is renowned for its transparency and visibility regarding fees and exchange rates, making it especially beneficial for SMEs to use its services.
“This transparency allows SMEs to make informed decisions and understand the exact amount that will be received by the recipient, better manage their finances, avoid unexpected costs, and ensure more accurate budgeting and financial planning. By leveraging Verto's services, SMEs can focus more on growth and less on navigating the complexities and uncertainties of traditional banking structures,” he says.
When converting as much as R2 million into USD, for example, Verto outshines notable traditional banks in South Africa when it comes to cross-border payments. So much so that a transaction like this may incur a total cost of as much as R76,025 with a leading traditional bank, whereas Verto charges a flat rate of R10,000 for the same process.
Moreover, Verto caters specifically to the needs of SMEs by offering user-friendly technology and dedicated customer support. The platform is designed to be easy to use, making cross-border transactions more accessible for businesses of all sizes.
Additionally, Verto understands the challenges faced by SMEs and provides personalised support to help navigate the complexities of international payments. Verto also offers a range of different products that SMEs can utilise to collect, hold, convert and payout. This includes payment links, virtual cards and API integrations.
“Verto's cost-effective solutions, enhanced transparency, tailored support and diverse range of products for SMEs position it as a compelling alternative to traditional banks in South Africa, offering businesses the means to streamline cross-border payments and significantly reduce overall costs,” concludes Oyetayo.
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