In a year mired with disruption triggered by the pandemic, the changing needs and shifting dynamics of the payment value chain has everyone from corporate treasurers to CFOs calling for agile solutions to address their payment challenges. Thus, the rise of payments technologies particularly through APIs are promising faster, easier, and more transparent transactions, resulting in positive disruption that companies are now embracing. Traditional bank-dominated payments processes are now no longer the norm.
In a recent report by McKinsey, 2020 shows a contrast between the first and second halves of the year in terms of payment revenues. There was an estimated 22% decline in the first half of the year, while the second half of the year shows promise with a stronger performance. The world economy is slowly moving forward with high hopes to gain back the estimated 4% growth in payments revenues over the next few years.
What does this mean for global companies with a multitude of payment transactions? CFOs, Treasurers, and Controllers are now looking to take charge of their global payroll and payments situation while also managing their FX risk. Businesses are looking for options for integrated solutions that will help them become more competitive and limit revenue loss. With the rise of payment API infrastructure, CFOs and Treasurers are given the ability to control how they make their payments and manage their risk. With all this in mind, how is API infrastructure disrupting B2B and B2C industries in payments?
Convenience and security all in one package.
New payment APIs have modern workflows that are intuitive, quick, and error-free. It allows dynamic reporting in seconds with no massive infrastructure installations to worry about. Gig companies such as Uber or Upwork can easily manage payments for their gig workers, deliver them on time, in various currencies and even address hedging needs with their own accounts.
Gone are the days of having to look for the best FX rates in your local bank or having to open an account in various currencies. Organizations such as a film production company using workers in different countries can now make payments via a single window without having to maintain local currency accounts. New APIs by global payment companies have direct access to hundreds of currencies in countries all over the world.
The beneficiary validation process is no longer a re-keying effort.
APIs have created a handy beneficiary validation tool that detects errors so returned payments are no longer an issue. Global payroll companies looking to execute a payout can be guaranteed their employees will be paid on time while the audit trail that is required is easily accessible.
Improved data and analytics.
Data is king and having information accessible for all payouts will give CFOs the ability to manage their FX risk and hedging as needed. With the analytics that comes with the API infrastructure, finding out customer acquisition or operational costs associated with global payments will be just as easy.
Aside from the above, let’s not forget that the important benefits of saving costs, streamlining operations, and freeing employee capacity are what matters most. With the numerous advantages that payments APIs are providing for organizations, it makes sense for them to dive even further into the world of technology.