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The cross-border payments space is witnessing a significant transformation, driven by technological innovations and a deeper understanding of customer needs. In this ever-evolving landscape, Gaurav Shisodia, Vice President India, Payoneer, shed light on key facets of the industry during an insightful fireside chat at the 14th edition of Techsparks Bengaluru, 2023.

Payoneer is a global payments platform that partners with freelancers, small and medium businesses (SMBs), marketplaces and enterprises, to solve their biggest payment challenges.

The discussion with Shisodia explored the dynamics of innovation, disruptions in B2B payments, the symbiotic relationship between banks and fintech companies, and the globalization of small and medium-sized businesses (SMBs).

Innovation in Cross-Border Business

The cross-border payments industry is not just about cutting-edge technology, it’s about understanding the intricacies of businesses and their unique pain points. Shisodia emphasised this fact, highlighting the importance of innovation rooted in customer insights.

To illustrate this concept, he shared an example from Payoneer’s journey. In 2016, the company identified a cumbersome process faced by Indian exporters in obtaining a Foreign Inward Remittance Certificate (FIRC). Working in collaboration with their partner bank, Payoneer digitised the FIRC process, offering a swift and efficient solution to this long standing issue. This innovation wasn’t solely technology-driven, it was an outcome of understanding of the customer’s needs. The result was transformative, setting a new standard in the industry and illustrating that innovation doesn’t always require complex technology.

He also spoke about the two significant levels of disruption that the payments industry has experienced. First, digitisation has transformed the global marketplace, allowing businesses to expand their reach significantly. This expansion presented a challenge—dealing with different currencies, regulations, and complex transactions when conducting business across borders. Payoneer and similar companies have risen to this challenge, creating platforms that not only facilitate international transactions but also offer the infrastructure to make these transactions seamless and efficient.

Shisodia pointed out that payment companies are no longer limited to transaction processing. They have added additional layers of services, including APIs to connect various platforms, data analytics for informed decision-making, and underwriting and lending to small and medium enterprises (SMEs) that would traditionally struggle to secure financial support. These multiple disruptions are reshaping the industry simultaneously, creating a dynamic and multifaceted environment.

Bank-Fintech Partnerships in Cross-Border Payments

The complex relationship between banks and fintech companies was addressed by Shisodia. “It’s an oxymoron. We work with banks, and we compete with banks for the same customer. So it’s a difficult balance to maintain,” he stated.

Fintech companies bring agility and innovation, while banks boast extensive customer bases and product offerings. Collaboration between these entities results in customer-centric approaches, faster services, cost reductions, new products, and greater accessibility to lending opportunities. This collaboration is a net positive for the industry, reflecting the symbiotic nature of their relationship.

SMBs Going Global

The globalisation of SMBs is on the rise, driven by government incentives, and expanded serviceable addressable markets due to digitization. To succeed in international markets, Shisodia is of the opinion that SMBs must conduct thorough market research, understand legal and business environments, start small, gather customer feedback, and scale when confident. A strong payment service provider is vital to support international expansion and ensure compliance with local tax regulations.

Success in Cross-Border Payments

Shisodia highlighted three essential traits for success in the cross-border payments space. Collaboration takes centre stage, particularly in the fintech sector. Working with regulators, partner banks, and ecosystem players is crucial to unlock value for customers. Adaptability is another vital trait, as the industry evolves rapidly, and those who fail to keep pace, risk falling behind. Lastly, he highlighted the significance of building strategic alliances. By recognising the complementary skills and products within the industry’s ecosystem, companies can forge win-win partnerships that co-create and deliver value to customers.

He concluded the discussion by elaborating on Payoneer’s services. The platform offers access to over 200 countries and 150 currencies, making it a comprehensive solution for global transactions. With a robust presence in India, Payoneer caters to both B2B (business-to-business) and B2C (business-to-consumer) payments. Their transparent and cost-effective solutions, including virtual collection accounts and user-friendly APIs (application programming interfaces), enable easy integration with ERP (enterprise resource planning) and invoicing platforms. Payoneer’s services empower businesses to efficiently manage their cross-border transactions, fostering growth and global expansion.