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AFP 2018 Blog

Cross-Border Payments Challenges and Solutions for Treasurers

Jun 27, 2018

Transferring money abroad to emerging markets is never easy for treasury professionals. You’ve got to deal with a lack of transparency, delays on receipt, anti-money-laundering (AML) risks, and lack of control over FX rates—to name several big challenges. What’s more, all of them ultimately impact the cost to the sender and receiver of the payment.

Understanding and following AML guidelines and regulations is paramount to a seamless cross border payments process.

There are hidden costs in the payments as well, especially intermediary fees and the FX rate. Identifying and confirming those costs on the front end, before funds are sent, can help to control the costs. Additionally, understanding and following AML guidelines and regulations is paramount to a seamless cross border payments process.

And then there is another operational challenge to consider: the pros and cons to sending transfers in hard versus local currency. Sending transfers in hard currency (i.e., USD) may be necessary at times due to the use of hard currency on the beneficiary’s side, or a requirement of hard currency by a supplier. However, when possible, it makes sense to consider sending local currency to take advantage of a more competitive exchange rate, to mitigate intermediary fees, to ensure the exact amount of local currency for a supplier invoice, timing of the delivery of funds, and to have control over the exact costs of the transaction.

On top of all these traditional cross-border payment options, you can add cryptocurrency to the mix. Currently, cryptocurrencies are only a very limited option for cross-border settlement, but their popularity as a future option could potentially grow.

The session I am co-leading at AFP 2018, Overcoming Pitfalls in Cross Border Payments, will address all these challenges. We’ll discuss real solutions, including how to identify hidden costs and how to control them; overlooked compliance requirements and concerns, cryptocurrencies, selecting an international payment provider, and more.

My co-presenters, Sassan Parandeh, CTP, Treasurer of ChildFund International and David Tao, Senior Treasury Manager at UBER have a wealth of experience operating in dozens of countries, and know all too well how frustrating the cross-border payments landscape can be.

So join us! We’ll have answers to all your cross-border payments questions.

Clayton McDonald
Global Head of Sales - Payments Division
INTL FCStone Inc.