Seamless cross-border payments with Finastra X-Border Connect - enabled by Visa Direct

Cross-border transactions are becoming increasingly crucial in business and trade as the global economy continues to expand. The demand for faster, more secure and transparent solutions is skyrocketing, yet traditional international payment systems continue to lag. As a result, innovative technologies and collaborative partnerships are reshaping the landscape.

Here, we explore how cross-border payments can be transformed and why modern solutions like Finastra X-Border Connect enabled by Visa Direct are paving the way for a more connected, real-time, and efficient cross-border payments ecosystem.

Why cross-border payments matter

Cross-border payments are financial transactions in which the payer and recipient are in different countries. They can be made in various ways, including bank transfers, credit card payments, e-money wallets and mobile payments.

Certain trends, such as expanding supply chains, cross-border asset management and global investment flows, international trade and e-commerce, and the increasing number of international remittance solutions, have intensified the demand for seamless and secure cross-border payments.

There’s also a growing competitive interest in the market, with innovative cross-border payment solutions emerging to improve efficiencies, reduce costs and enrich user experiences.

Challenges with traditional cross-border payments

The payment ecosystem is rapidly changing, driven by regulatory mandates like ISO 20022, the growth of instant payment rails and cross-border linkages via bilateral and multilateral connectivity programs. These changes demand greater speed, transparency, accuracy, interoperability, and security in cross-border transactions.

However, banks are still dealing with the restrictions associated with outdated legacy systems, and risk losing market share. Additionally, managing multiple correspondent banks and KYC requirements adds to this challenge.

To address the above challenges and capture growing opportunities, fintechs are offering efficient alternatives to traditional banking processes. This is especially true for financial institutions and businesses engaged in global trade and have customers they serve who require small-ticket x-border transactions, who must address diverse regional and country-specific regulatory environments, time zones, unpredictable processing times, a lack of visibility and transparency in fees, inconsistent payouts due to foreign exchange fluctuations, as well as increasingly complex fraud scenarios. Selecting the right technology partner is critical to addressing these challenges and delivering seamless cross-border payments.

We’ve mapped out the complexities of evolving cross-border payments and why it’s critical that financial institutions partner with Fintechs to embrace modern technology. Read our report ‘Embracing the future of cross-border payments’.

Finastra X-Border Connect enabled by Visa Direct: A faster and simpler cross-border payment solution

As cross-border payments grow, traditional bank payment methods no longer meet client expectations fully and are less suitable for new use cases emerging from individuals, the gig economy and small to medium businesses (SMBs). Modernizing payments infrastructure can help banks and financial institutions address the challenges of traditional ways of enabling cross-border transactions.

Finastra’s cross-border payment solution uses the Visa Direct Network, which enables faster, more secure, transparent, and cost-effective international payments. It offers a single integration point to the Visa Direct Network through our Payment Hub solutions - Global PAYplus and Payments To Go - which are pre-integrated via our platform FusionFabric.cloud, reducing implementation times.

These multi-rail hubs streamline payment processing for all payment types, including cross-border, with best-practice workflows, intuitive configuration through business rules and AI-driven analytics, allowing banks to simplify, optimize and automate payment operations, as well as reduce operational complexity.

The solution supports multiple disbursement mechanisms - account-to-account, e-wallet and card transactions - and can reach over 7 billion endpoints in 190 countries. It also offers several value-added services, including FX, funding options, account verification, validation, fraud and risk management, as well as overlay services like Request to Pay.

The solution empowers banks to scale fast with protection from account-to-account fraud. Introducing new currency corridors can take weeks instead of the months required to establish correspondent networks. Also, our digital cross-border payment solutions reduce manual intervention and errors, as well as ensure regulatory compliance as part of the service. Additionally, the solution reduces customer acquisition cost (CAC) and enhances time-to-market for banks, both of which are important drivers of alternative payment rails and support real-time cross-border payments and remittances. Other benefits of using Finastra X-Border Connect enabled by Visa Direct, include:

• Reduced transaction costs - When compared to traditional correspondent routes and no cost of liquidity tied up in correspondent networks.
• Improved customer experience- Faster delivery, greater transparency, high levels of automation and STP, as well as centralized visibility and control.
• Reduced operational overheads - Avoid managing multiple clearing connections or maintaining systems in line with regulatory changes.

Final thoughts: Why modernizing cross-border payment solutions is essential

Finastra X-Border Connect enabled by Visa Direct is a new solution that will offer our bank customers access to seamless cross-border payment capabilities. With Visa Direct's direct integration into our existing payment platforms, this solution is fast to onboard and provides access to global markets and exciting new use cases. Combining Visa Direct’s reach with Finastra Payments solutions’ ubiquity and interoperable capabilities makes Finastra X-Border Connect enabled by Visa Direct stand out from competitors.

The solution supports a wide range of business use cases, including:

• Remittances - Foreign workers sending money to relatives in their home countries.
• Funds disbursement - The ability for businesses to pay globally and quickly to their recipients.
• Gig employees and marketplace sellers - The ability to deliver funds to their accounts, wallet or card.
• Business bills payment - The ability for businesses to pay quickly for services and/or billers.
• Merchant payments - Rebates and reimbursements with the ability to credit the end consumer quickly and efficiently to increase customer satisfaction.
• Consumers’ money transfer - A direct transfer between accounts, whether it's Consumer-to-Consumer or Consumer-to-Business.

Don’t hesitate to contact us if you have any questions.