Fintech helping online merchants expand beyond borders
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We’ve entered a new era for cross-border trade. Marketplaces are now opening their doors, creating opportunities for merchants to sell their goods to buyers worldwide.

To be successful, marketplaces understand they need to support merchants in many aspects, including web platforms for offering the goods, tools to reach customers and management of the sales experience.

Some marketplaces even help with logistics, multi-lingual variances and the collection of funds in different currencies. Of course, with this development comes the need to pay the growing base of merchants, bringing rapid and constant change to the world of payments. 


Cross-border payments present merchants with a new dimension of challenges. One of the key issues is currency management.

The ability for merchants to compare the pricing advertised to the buyer against the one they set, as well as ensuring the marketplace sends the correct currency to the merchant’s account, has proved to be daunting.

How much effort is required to manage this complexity and how can a company control and reduce the costs of so many currency exchanges? The challenges are seemingly never ending.

How do merchants and retailers address these challenges? It’s a combination of using the right payment vendor and having the cooperation of the marketplace.

Fintech companies are flattening the world — allowing marketplaces to initiate payments in their currency of choice to a merchant anywhere in the world, while, simultaneously, permitting the merchant to receive it wherever they live, in their currency of choice. 

For the payment provider, sending cross-border and multi-currency payments involves dealing with each country's regulations and rules, adhering to each country's bank account field requirements and having the capability to exchange in multiple currencies.

They have to do so in a way that is timely and cost effective for both the marketplace and the merchant. Adding new routes on a daily basis and optimizing existing payment routes is also necessary and requires the technology layer to be flexible enough to connect with any type of bank or financial route.

Another consideration is creating a technology that supports flexible language and country-specific setups, which are seamless to both the payer and the receiver. Paying in a simple way, via application program interfaces (APIs), and getting the payment quickly is not the end of the road.

Both the marketplace and sellers expect extensive and effective reconciliation capabilities via reports and APIs feeding directly into their system.

As a merchant becomes successful in a marketplace, the next steps for the payment provider is to assist the seller in expanding to additional marketplaces who pay out in different currencies. The next challenge is how to get paid from multiple platforms, in multiple currency balances, or to multiple bank accounts, in a centralized, unified way.

Payments are a crucial cog in the wheel that takes a business global, but it is no easy undertaking. On top of the regulatory side of international payments comes a strong technological consideration that must be resolved and constantly improved to meet the growing needs of merchants and marketplaces.

Fortunately for them, fintech companies are driving business-to-business payments forward, allowing the merchants and marketplaces to focus on what matters the most — the core of their businesses.


Noam Oren is the chief research and development officer at Payoneer, a cross-border payments platform that empowers global commerce.


The views expressed by contributors are their own and not the views of The Hill.