In today’s global economy, it’s so easy to order and pay for overseas products online. Take fresh Nordic salmon from a foodie e-commerce site as a case in point. Simply enter your debit or credit card number, and a frozen treat from across the Atlantic will arrive at your door in just a few days.
If only sending money to friends and family abroad were as easy. But that type of cross-border payment is a completely different kettle of fish.
For a long time, the only way to send money overseas was through a wire transfer. This method is not only slow, but it’s also expensive considering that traditional banks charge high international transaction fees. However, with the rise of fintech and the advent of embedded banking, brands can cut out the middleman — traditional banks and financial institutions — and offer faster, cheaper and easier financial services like cross-border payments – directly to their customers.
Read on to learn how cross-border payments work and why they’re essential for any company breaking into global markets.
The Embedded Finance movement
Embedded finance (EmFi) and embedded banking are at the forefront of a growing trend whereby any brand — in any industry — can offer banking and financial services directly to customers. Such services include accounts and wallets, payments, branded cards, and global money transfers.
For a seamless brand experience, these financial products are embedded through an API (application programming interface), so customers can access the services through a company's existing web and app platform.
There are numerous reasons why a brand would want to embed financial services directly, from its ability to generate new types of revenue, to helping improve the customer experience and increasing customer lifetime value (CLV).
The attraction of embedded banking for a brand's customer is that it offers a convenient, everyday financial interactions with companies they already know and trust.
Visitors to Walmart’s platform can buy groceries or household items, open bank accounts, obtain buy-now-pay-later financing, and even apply for health insurance. This is a prime example of how embedded banking can add revenue streams and strengthen customer loyalty.
But it’s not just heavy-hitters like Walmart that are leveraging embedded finance. Many companies and brands are realizing that customers now expect — and demand — convenient, streamlined services. If brands don’t provide this level of ease, their competitors surely will.
According to Juniper Research, companies and customers are embracing embedded banking and finance so enthusiastically that its market value is expected to exceed $138 billion in 2026. Moreover, the embedded finance market was valued at $43 billion in 2021.
A new way to make international payments
Payments were one of the first embedded banking services to take off in the early days of fintech. With the advent of embedded finance and the rise of the global economy, payment services are evolving to offer enterprises (and their customers) so much more.
While international expansion sounds like an exciting opportunity for large brands, it certainly comes with its share of complications. Working in different countries requires paying an overseas workforce, accepting payments, and partnering with manufacturing and logistics companies — all in various foreign currencies.
Doing so means businesses have to navigate global financial regulations and become fully compliant across the globe, which is a costly and unwieldy endeavor for companies. As such, it’s imperative for large enterprise companies to partner with a trusted and vetted embedded finance partner that can handle these responsibilities, as well as ensure safety and compliance.
The complexities of cross-border payments
The Federal Reserve recognizes that cross-border payments are inherently more complex than domestic payments. For example, the United States, European Union, and the United Kingdom all have different payment system regulations and provider structures, and those structures are constantly changing. Look at the effect of Brexit on the European financial ecosystem.
According to the Fed, international payments have historically been slow and costly because of the different currencies involved, individual country regulations, time zones, and because there is no end-to-end system or singular rule set.
But that has changed with the emergence of embedded finance. Providers like Alviere can now offer comprehensive solution, without needing to rely on banks to be part of the process.
The value of embedded cross-border payments
International payments used to depend on banks or corresponding banking institutions that acted as intermediaries to ensure secure transactions. But this process takes time, ties up capital, and increases fees.
In today’s economy, global companies need easier access to international payments. Large transactors with sizable overseas workforces need faster options, delivery guarantees, and solutions embedded into their processes for trade and procurement.
An embedded finance partner like Alviere eliminates the pain points for brands by removing the time and cost burden of compliance and keeping up with changing regulations.
Embedded finance providers handle international regulations
For global payments, an embedded finance partner like Alviere has already taken care of the legwork to ensure your company is fully compliant with every region in which you do business. Working with a partner that has an existing global money transfer capability frees up time, money, and resources so your company can focus on its core business — not on the complexities of international regulations.
Embedded finance fast-tracks international payments
Some embedded finance technology providers pursue regulation and compliance in several regions at once with in-country banking networks or strategic fintech partnerships. Alviere, for example, has unparalleled compliance in over 100 countries, which means any brand that partners with us has instant access to working and accepting payments around the world.
Embedded global payments are a boon for large companies that must make local payments to an international workforce. Salaries and wages can be huge capital outlays, and traditional cross-border transactions through banks affect liquidity by tying up capital for days. A solution provider like Alviere frees up that cash flow, and streamlines currency conversion.
Effecting cross-border payments saves your company money as you can move money around the globe while avoiding costly wire transfer fees charged by traditional international banks.
International remittances
Using an embedded finance solution like Alviere allows companies to offer a valuable service to customers who have family members in other countries. Your employees and customers can send money overseas at a lower cost, sidestepping traditional banks and requisite add-on FX percentages.
Compliance with embedded finance providers
A core pillar of the Alviere solution is our dedication to security and compliance, using and AI-based fraud and AML tools to protect clients, customers, and their funds. The Alviere HIVE platform has always-on security protections, and the platform is actively monitored by an expert compliance team.
Know-Your-Customer (KYC) identity management verifies and screens users and protects accounts from criminal activity. Biometric verification ensures secure customer onboarding for clients and prevents fraud. An anti-money laundering (AML) tool provides compliance in every application and identifies suspicious transaction patterns in real-time.
Facilitate cross-border payments for your brand
Embedded finance providers seamlessly integrate cutting-edge financial and security technology with your company’s existing platform so you can send international payments, pay globally distributed workers, and allow your employees and customers to send money to friends and family all over the world. And you can do it all knowing that every transaction is secure and compliant with applicable regulations.
The absence of intermediaries and banking relationships means that foreign exchange fees are reduced and time delays nonexistent. With cross-border payments, through embedded finance, sending money to Norway or salmon to the United States is a seamless, easy, and satisfying experience.
Contact Alviere to learn how our cross-border payment solution can help your company thrive, everywhere.
