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Saxo Payments investigates the challenges facing FX & payments firms

Saxo Payments recently commissioned research to gain insight into the challenges currently facing FX & payments businesses. On the basis of these research results, Saxo Payments Banking Circle published a new white paper titled: Missing the Opportunity: Are FX & payments businesses missing out because they can’t support the international trading ambitions of their clients?

Saxo Payments is building a B2B cross border payments marketplace in which every member benefits from being a part of the community – The Saxo Payments Banking Circle. Instead of having to wait for days, Saxo’s Banking Circle marketplace enables its Members to make and receive cross-border transfers instantly, at a low cost, in multiple currencies, and in a secure and compliant cloud-based environment.

The new Saxo Payments white paper ‘Missing the Opportunity: Are FX & payments businesses missing out because they can’t support the international trading ambitions of their clients?’ begins by outlining the key trends and factors currently impacting the global payments market. Based on its market research, Saxo names five key trends that it views as most influential to the global payments market, namely:

  • New market opportunities are being driven by globalisation
  • Digitisation and focus on customer engagement
  • New regulations have had major impact on global transaction banking landscape
  • Entry of third party payment providers
  • An entire new ecosystem is providing the infrastructure for B2B cross border payments; this ecosystem is underpinned by ‘utilities’

Presently, compliance, risk and operational costs are driving the banking sector to focus chiefly on domestic operations and digitising of the business. Because of this, firms that want to trade internationally are often forced to maintain separate accounts with multiple banks, in multiple countries. Application processes are typically lengthy – taking anywhere from 6 – 12 months, which makes for an administrative nightmare. Lack of competitive rates & long delays in payment settlement are both suspect, but either way it seems that accessing global transaction banking is one of the key challenges that internationally trading businesses currently face.

Online trading opens the door to bring low cost FX rates to smaller businesses that need to be able to make and receive international payments. Nevertheless, research shows that many businesses are unable to expand into new markets and reach full potential due to slow, expensive services that put too high of a burden on smaller firms and start-ups. The research base for the study commissioned by Saxo was made up of Acquirers, Payment Service Providers (PSPs), Issuers, Merchants, Banks and FX businesses, with respondents operating in several regions around the world. Over 20% of respondents were based in Europe, 41% in the UK, 14% in the US, 6% in the Far East and Africa, and 18% were operating in other regions.

An area of particular importance that was examined during the research was cross border transfers. The top three concerns that were indicated by respondents were high costs, transaction speeds, and the manual nature of processing. Given the aforementioned trends facing the sector, it is not surprising that the top three payments related factors hindering the growth of FX and Payments businesses are the cost of FX, access to bank accounts and the speed of settlement.

For more detailed research results, read or download the complete white paper by Saxo Payments in PDF format by clicking here.

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