18 Jan 2023

International payment systems are often a barrier to growth for businesses. The solution? 'Curation'

Curation paytrix

Co-Founder & CPO, Eddie Harrison explores: The challenges of international payments, the pros and cons and payments orchestration, Payments Curation – going beyond automation and more...

For fast-growth startups, the early days can be thrilling. You have come up with a great new product or service, found the perfect marketing strategy, and hit gold with a rapidly expanding customer base. The next step is obvious - strike out from home and try to replicate your success in global markets.

Often, that's where things come grinding to a halt. Faced with what is a highly complex maze of foreign legislation, unfamiliar best practices, and outdated infrastructure, making international payments – even simple transactions like paying a seller or receiving funds – becomes a nightmare of multiplying intermediaries, spiralling costs, and increased operational friction. It's little wonder that according to a survey by Wise, 51% of growing businesses are put off overseas expansion because of the complexity of managing international payments.

The challenges of international payments

This complexity shows no sign of diminishing anytime soon. Solutions that can support the full payment stack tend to be heavily regional. Whereas with many global solutions that are emerging, the trade-off is that they only support a specific function, such as payment acceptance.

To leave its home market a business needs to make approximately 12 API connections, and can anticipate adding around three new partners for every new country they move into - taking up huge amounts of time and resource, and often with unoptimised pricing structures that tie up capital and resources. International payments are not for the faint hearted.

What's more, payments innovation is an ongoing process, and alternatives to legacy infrastructure are emerging the whole time, adding yet more complexity.

The pros and cons and payments orchestration

So, how can businesses navigate this complexity and ensure that payments do not slow them down as they look to scale internationally? One approach is to use payments orchestration platforms. These platforms bring together a wide range of services and payment gateways on an integrated software layer. In effect, they provide a surface level approach for making the CTO’s job a little easier.

Orchestration platforms are a good entry-level solution for SMEs as they start trading across borders, but they are only part of the solution. For a start, orchestration platforms are focused on achieving just one use case: payment acceptance at a technology level. Orchestration platforms are therefore unable to provide services further down the payments stack, such as settlement or payouts. They also struggle to cope operationally and commercially when payments grow to significant volumes.

Another issue is that while orchestration helps reduce complexity in payments acceptance, it does not eliminate it entirely. The approach requires separate contracts, multiple Know Your Customer processes, and 100s of API connections. So, while orchestration is great at saving time through ready-made connections, costs can increase as businesses have to pay for each provider and connection. Moreover, as orchestration layers are unregulated and unable to sit in the flow of funds, they don’t build economies of scale that provide savings.

Payments curation – going beyond automation

This is where payments ‘curation’ enters the story. Payments curation services enable businesses to access the best payments products around the world using just one contract and one API. Payments curation means that businesses only need to pay once to enable a full payments stack inclusive of payment acceptance, settlement accounts, as well as payouts and the ability to manage them across borders.

The approach is also simplicity itself, with the payments curation provider taking care of the connections, contracts, and infrastructure required to build the stack. That means businesses can focus on their core operations rather than a back-office system. Payments curation is therefore a deeper, more holistic solution to the complexities of international payments, and one that can significantly reduce businesses' growing pains as they expand internationally.

Times are currently tough for most businesses, and any barriers to growth must be removed. Organisations that adopt payments curation will find that they are in a better place to break into new markets and scale rapidly. That is a major competitive advantage.

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