Thought Leadership

Cross-Border Payment Solutions Should Be More Like Global Shipping Services

TL;DRWhen you compare the validation and tracking processes of established global shipping companies, such as FedEx, with current money transfer methods, it’s hard not to feel disappointed. Luckily, Hyperwallet’s Head of Product, Bill Crowley, is working to make worker and seller payout tracking as easy as shipping an expedited package.

Consider the following scenario. You’re the Head of Payments at a two-sided ecommerce marketplace. You’ve recently opened a new office in the United Kingdom and you need to send the originals of some paperwork to an overseas colleague. There’s just one problem: the contracts need to be in the hands of your English coworker within two days. Now you have to decide whether to send the documents by standard mail and risk having them arrive late, or opt for an express shipping service, to ensure fast, efficient, and secure delivery.

The choice is obvious in this situation: express ship the documents. Using an express mail service offers a number of benefits that standard mail services don’t (depending on which provider you choose, of course):

  • Validation of the address to which you’re sending the package
  • Seamless trace-and-track visibility from pickup to delivery (including import and departure scans at all depots)
  • The added security of signature proof of delivery
  • The ability to share shipping updates via e-mail
  • The option to redirect shipments

Expedited courier services have built their reputation around dependability, security, efficiency, and ease of use, taking advantage of holes in the standard mail delivery process. When you toss a letter in the mailbox on the corner, you don’t really know what going to happen next. There’s no visibility into the delivery route. There’s no verification that the address you’re sending the letter to exists, or insight into how long it will take for the item to arrive.

Where Are My Earnings?

Now, as the Head of Payments at your ecommerce marketplace, let’s imagine that you’re trying to send earnings to your workers or sellers on your platform. Unfortunately, bank money transfer models (especially those built to handle high volumes of payouts) are built a lot like traditional mail delivery systems. When you use a bank to send money, especially across borders, it’s a lot like popping a letter in the box: the sender and the recipient have no choice but to trust that the banks involved in the transfer will execute it quickly, securely, and as affordably as possible (which, if you’ve ever sent a cross-border transfer, you’ll know is definitely not the case).

Like the standard postal service, there are a lot of holes in bank money transfer systems. For starters, there’s typically no validation of the destination bank when a transfer is initiated. You might be asked to provide a routing number (the number that’s associated with the bank branch where you want to send the money to), but there’s no guarantee that the bank from which you’re initiating the transfer will check to make sure that you entered a valid number. Mess up one digit and you won’t know until the payment fails. Worse yet, you won’t know where your money is, when you’ll get it back, or what amount will be returned to you.

It gets worse. Let’s say you want to send a worker or seller payment from Bank A to Bank B; however, these two financial institutions don’t have an agreement with each other to enable this transfer. In order to successfully move your money between accounts, Bank A needs to send the funds to Bank C, which is a mutual partner of Banks A and B—but neither the sender or the recipient is notified of this rerouting. Nor are they told about the additional time and costs associated with this detour. There’s no way to track or confirm delivery of the payment; rarely is there even an estimation of when the funds might show up. Simply put, there’s no visibility in your transfer path.

There’s clearly an issue with how banks manage cross-border money transfers and payments. The process is inefficient, costly, and out-of-date. That said, I can understand why international payments still work this way. Building a truly global platform that enables payment transfers as seamless as shipping services is no easy feat. Trust me; I’ve been working on it for 20 years.

Send Payouts Like You Send Packages

Providing our clients with granular control over their payout process through trackable cross-border payments has long been our goal at Hyperwallet. Like express mail services, our global payment solutions make it easy for companies:

  • Ensure that the destination bank and account are valid using bank validation databases before sending the money.
  • Fully track-and-trace payment visibility, beginning the moment the payment is uploaded into the system.
  • Pinpoint delivery date through enhanced delivery algorithms that take into account national and international bank holidays, payment network cutoffs, and delivery service-level agreements.
  • Provide recipients with full control over how they receive their funds.

Thanks to new advances in real-time ACH, we’ve been able to launch Hyperwallet’s Payment Tracker and provide a true end-to-end payout tracking value chain. As you can imagine, there is an overwhelming number of use cases for this new technology—just think of the thousands of collaborative, on-demand, and sharing economy platforms that could benefit from integrating this granularity into their worker and seller payment experience. Fast, secure, simple, and streamlined—sending money to your independent workforce can be as easy as shipping an express package.

Want to learn more about Hyperwallet’s global payout capabilities? Contact a solutions expert today.

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