<a href="https://www.bbva.com/en/everything-need-know-psd2/">It all began in 2007 </a>when the European Union launched a directive that majorly streamlined cross-border transactions within the European Economic Area (EEA). The directive called the Payment Service Providers Directive (PSD), aimed to develop a single payment market in the EU and improve the current competition and transactional efficiency.&nbsp;

Before the Payment Service Providers Directive (PSD) was introduced in 2007, conducting cross-border transactions within the European Economic Area (EEA) was a complex and costly process.

You had to deal with multiple banks, various currencies, and high transaction fees, making it challenging to expand your business to international customers. The lack of a unified payment system created inefficiencies, making it difficult to compete with larger businesses.

However, with the implementation of the PSD, the process became much simpler. Now, you can use a single payment service provider to manage transactions in multiple EEA countries, reducing transaction costs and currency exchange hassles. This streamlined approach has opened up new opportunities for your small business to expand across borders, compete more effectively, and serve customers across the EEA with ease.

Although the directive was a huge success, the EU felt that there was room for more innovation.The EU amended PSD in 2009 to create the PSD1 framework, which was again amended in <a href="https://www.ecb.europa.eu/paym/intro/mip-online/2018/html/1803_revisedpsd.en.html">2013 to its current form of PSD2. </a>The current form, PSD2, is widely considered to have ushered in a new era of consumer-centric financial services in the EEA.&nbsp;

You decide to use a budgeting app that provides valuable insights into your spending habits. Using the PSD2 framework, you can now securely link this app to your bank account. This means the app can access your account data with your consent and provide you with more accurate financial advice and budgeting tools.

Consumers now enjoy increased choice, security, transparency, and convenience in their financial transactions.

Yes, PSD2 must sound intriguing to you, but a proper understanding of what PSD2 is is vital in the current scenario when most countries are looking to create a framework similar to PSD2 for international payments.

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The PSD2 (Payment Services Directive 2) is a directive released and managed by the European Union to regulate international <a href="https://www.skydo.com/blog/eefc-account-vs-payment-platforms?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">payment services</a> within the European Economic Area (EEA). The European Union introduced PSD2 to ensure healthy competition, innovation and secure payment process in the European payment industry. PSD2 builds upon the original Payment Services Directive (PSD) and was adopted in 2015, becoming effective on January 13, 2018.

Through the PSD2, the European Union has introduced the Strong Customer Authentication (SCA). SCA completes the transactions by including at least two of the three levels of authorisation: something they know, something they own, and something they are. The transactions require a password or a PIN, a mobile number for OTP and additional security in the form of facial recognition or fingerprint.&nbsp;

PSD2, along with increasing transactional security, has resulted in increased healthy competition by opening up payment services to fintech startups and prompted traditional banks to enhance their offerings. As a result, consumers now enjoy a more user-friendly and cost-effective financial experience.

With a broader range of payment services, consumers can <a href="https://www.skydo.com/blog/top-paypal-india-alternatives-for-international-payment">choose a payment service provider</a> with higher customer protection measures and lower transaction fees, further establishing the need for innovation to sustain.

How is PSD2 relevant to Stop Hidden Fees?

PSD2's relevance to stop hidden fees lies in its potential to address opaque pricing practices in international payments. Set to be incorporated into UK law, these regulations prohibit non-transparent pricing methods. Currently, banks and brokers often conceal costs within unfavourable exchange rates, catching customers off guard with undisclosed fees.&nbsp;

PSD2 emphasises the need for consumers to know the 'real costs and charges' associated with cross-border money transfers, echoing the initial Payment Services Directive (PSD). The crucial aspect is whether the government will uphold this commitment, considering past instances of non-compliance. PSD2 presents an opportunity to combat hidden fees and enhance transparency in financial transactions.

Open banking is a broader concept that refers to the practice of banks and other financial institutions opening up access to their customer’s financial data, with their consent, to third-party providers (TPPs) through secure APIs (Application Programming Interfaces). This data sharing allows TPPs to develop new financial products and services.&nbsp;

The concept of open banking started in 2007, with the EU introducing the PSD (Payment Service Providers Directive) to ensure a single payment market in the EU. However, in 2013, the EU proposed an amendment, giving rise to the PSD2. The amended directive introduced the concept of TPPs to give a much-needed push to the opening banking spectrum.&nbsp;

PSD2 serves as the legal framework within the EU that enables open banking practices. It sets the regulatory foundation for secure financial data sharing between banks and third-party providers. Under the PSD2 regulation, the banks are required to provide customers' account information (after their consent) to third-party service providers, allowing customers to:&nbsp;

With PSD2’s push to open banking, the practice allows customers to access a broader spectrum of financial services, including payment initiation, account aggregation and personal financial management. Now, the customer can choose from a host of third-party providers (TPPs) and applications to execute international payments effectively.&nbsp;

Several fintech companies have leveraged the regulatory framework provided by PSD2 to develop efficient and cost-effective <a href="https://www.skydo.com/blog/real-time-tracking-of-international-payments">international payment services.</a> These companies have utilised access to bank APIs and customer account data to create innovative solutions. Some examples include <a href="https://www.skydo.com/blog/top_5_wise_alternatives_for_international_payment">Wise</a>, <a href="https://www.skydo.com/blog/top-paypal-india-alternatives-for-international-payment">PayPal</a>, <a href="https://www.skydo.com/?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=demo_click">Skydo</a>, TransferGo etc.&nbsp;

Here is the impact of PSD2 on international payments: 

The main motive behind amending PSD and PSD1 to create PSD2 or even introducing such a directive has always been targeted towards the end consumers making <a href="https://www.skydo.com/blog/cut-international-transaction-costs?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">international transactions</a>. With PSD2 and open banking, they have experienced several benefits in terms of competition, transparency, cost and security.&nbsp;

Global Implications and Future Trends&nbsp;

The introduction of PSD2 by the EU has been a motivating step for global economies as they look to revolutionise their payment industry. Since the EU introduced PSD2, financial experts, policymakers and regulators in other countries are working towards creating a similar framework to promote competition, innovation, and security in financial services. Currently, countries outside the EEA are exploring open banking and how they can leverage it to create a more interconnected global financial ecosystem.&nbsp;

PSD2 has also raised the bar for other countries to ensure better cybersecurity standards and ensure quick processing speed for international payments. Fintech companies that have leveraged PSD2 in EEA are expanding their business to offer other countries better payment solutions with lower transactional fees.&nbsp;

Countries such as Australia, Canada, and Singapore have already introduced or are considering open banking regulations. This chain reaction may continue and expand to countries like India, launching an official directive similar to PSD2.&nbsp;

The increased adaptation of advanced open technologies such as blockchain and digital currencies may play a vital role in the future expansion of PSD2 and open banking. Such technologies, along with international banking partnerships, will play a prominent role in streamlining international payments and cross-border transactions, further transforming the financial landscape.

International payments will only rise in volume as more individuals and businesses establish their global presence. The introduction of PSD2 by the EU and the resulting push to open banking and other customer-protecting measures have positively impacted cross-border transactions and have called for the launching of similar directives in other countries.PSD2’s influence is seen in the proliferation of open banking initiatives, enhanced cybersecurity measures, and improved consumer experiences worldwide. As the financial industry continues to evolve, the principles and trends set in motion by PSD2 will shape the future of banking and payment services on a global scale.

Ans: The PSD2 directive, or Payment Services Directive 2, is a European Union regulation designed to enhance and regulate electronic payment services. It aims to promote innovation, competition, and security in the financial industry by allowing third-party access to banking data through open banking APIs.

Ans: PSD2 in open banking refers to integrating Payment Services Directive 2 into the open banking framework. It mandates banks to provide secure access to customer account information to third-party providers, fostering competition and innovation in the financial sector.

Q3. What is PSD2 regulation and what is the impact?

Ans: PSD2 regulation is a set of rules governing payment services within the European Union. Its impact includes increased security measures, open banking initiatives, and enhanced competition as third-party providers gain access to customer data, fostering innovation in the financial sector.

Q4. What is the difference between open banking and PSD2?

Ans: Open banking is a broader concept, while PSD2 is a specific regulation within the European Union. PSD2 mandates open banking practices, requiring banks to share customer data securely with third-party providers. Open banking, in a global context, encompasses various initiatives that promote similar data-sharing practices for innovation and competition.

Q5. According to the PSD2 mandate, what is the maximum number of days to refund the disputed amount?

Ans: The PSD2 mandate stipulates that in case of a disputed transaction, the maximum number of days for a refund is 15 business days from the day the payment service provider receives the complaint.

Q6. How does PSD2 and open banking affect the financial industry?

Ans: PSD2 and open banking positively impact the financial industry by fostering innovation, competition, and improved security. These regulations encourage the development of new financial services and products, driven by collaboration between traditional banks and third-party providers, ultimately benefiting consumers with more choices and enhanced user experiences.

Ans: PSD2 came into effect on January 13, 2018, within the European Union. However, individual countries may have slightly different timelines for implementing specific aspects of the directive.

Ans: Yes, PSD2 is a regulation specific to the European Union. It aims to standardise and enhance payment services within EU member states.

Ans: PSD2 has a transformative impact on banking by promoting competition, innovation, and security. Banks are required to open up their customer data to third-party providers, fostering the development of new services and ensuring enhanced security measures for electronic payments.

Ans: PSD2 applies to all European Union member states. Therefore, the PSD2 countries include those within the EU, as the regulation is designed to create a standardised framework for electronic payment services across the entire union.

PSD2 and its Impact on International Payments

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"The current state of cross-border payments is not fit for the 21st century."&nbsp;

Mr. Ravi Menon, the Managing Director of the Monetary Authority of Singapore, said this in his speech at the <a href="https://www.bis.org/review/r221011b.htm">Annual SWIFT International Banking Operations Seminar</a>, 2022.

The <a href="https://www.pwc.in/assets/pdfs/the-indian-payments-handbook-2022-2027.pdf">Indian Payments Handbook 2022-07</a> explains two prevalent challenges with cross border payment solutions –high transaction cost and the long duration for end-to-end settlement of cross-border payments. The average price of receiving inward remittance is 6% at present. The United Nations is working on reducing this cost to 3% by 2030. In fact, it is one of their Sustainable Development Goals (SDG).

Furthermore, according to the Handbook, India is the largest market for inward remittance flow, making seamless cross-border transactions crucial for the economy.&nbsp;

However, these challenges serve as the biggest threats to the business landscape. It means letting go of a significant sum in every transaction and delays in receiving payments. These factors trigger critical issues such as cash flow, reduced profit margin and increased debt.

Payment platforms, like Skydo, aim to revolutionise the sector by making cross-border payments more efficient and cost-effective. Let's understand the pros and cons of cross border payment solutions in detail and how to choose the right payment gateway.

Currently, the most common ways to send money across borders are through banks, credit cards, e-money wallets, and mobile payments. These methods often depend on systems like SWIFT or the related payment platform. As a result, international transactions are usually slower, more expensive, and less transparent than domestic ones.

Hence, cross border payment solutions are fundamental for business growth and expansion. Here is how they help businesses receive global payments seamlessly by tackling regulatory challenges.

Many businesses are sceptical of offering their services or products to international clients because of payment delays. However, cross border payment solutions like Skydo help receive cross-border payments quickly by incurring low costs.

This enables entrepreneurs to expand their business globally, get access to a large client base, and boost revenue.

Cross border payment solutions can accelerate transactions and optimise cash flow. The processing time for global payments through banks is around 5-10 days. However, it can take up to a month if the transaction gets stuck due to regulatory challenges or inadequate details.&nbsp;

Digital payment gateways like Skydo significantly reduce the processing time for cross-border payments by opening a virtual bank account for your business in another country.&nbsp;

This way, the client can remit the money to your virtual bank account in the respective country, which will pass through the Skydo platform and into your bank account maximum within T+2 days. You can further track this whole journey through the tracker available against each invoice.

3. Currency Conversion and Risk Management

In tech service exports, businesses often lose money due to currency conversion fees and additional hidden charges. Skydo’s cross border payment solution offers transparent currency conversion by displaying real-time exchange rates.

They also offer competitive exchange rates and help businesses calculate the accurate currency cost compared to traditional banks.

Some payment gateways also help manage currency conversion risk by offering hedging options. It allows businesses to hold their payments securely in case the value of the foreign currency depreciates.

4. Enhanced Security and Fraud Prevention:

According to a <a href="https://www.pymnts.com/news/b2b-payments/2022/56-percent-businesses-are-concerned-about-cross-border-payments-fraud/">survey</a>, fraud in global payments is a concern for 56% of businesses. Moreover, 52% of them also consider data theft during payment transactions as one of the significant risks in international payments.

cross border payment solutions mitigate this risk by offering enhanced security measures. Payment gateways use artificial intelligence systems to detect and stop fraudulent activities.



Learn more: <a href="https://www.skydo.com/blog/how-skydo-increased-success-rate-on-international-payments?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Breaking Barriers, Bridging Borders: How Skydo Increased Success Rate on International Payments</a>

While cross border payment solutions have been a game changer for businesses in expanding their services to international markets, there are four significant challenges - cost, speed, access and transparency.&nbsp;

High transaction cost is a significant roadblock to receiving global payments. The complexities arise primarily because a) multiple currencies are involved and b) various channels or levels in payment flow, such as banks, payment facilitators and payment operators exist.

The <a href="https://www.google.com/amp/s/www.livemint.com/brand-stories/how-to-save-on-international-money-transfer-rates-fees/amp-11687963871859.html">average cost of international wire transfers</a> is between $15-$75 per transaction. Therefore, before you choose a payment gateway, research and compare the transaction value in-depth, currency conversion, and processing fees charged by cross border payment solutions. Moreover, you must be aware of any hidden costs levied by the payment service provider.

Regulatory challenges and adherence to international financial compliances are massive obstacles while dealing with cross border payment solutions. Businesses have to navigate through anti-money laundering laws in foreign countries. Global payments often get stuck in regulatory processes, leading to unnecessary delays.

<a href="https://fbj.springeropen.com/articles/10.1186/s43093-020-00013-0">Studies</a> suggest that foreign exchange rate volatility harms cross-border imports and exports. Multiple currencies are involved, and the value can change at the time of the payment. If the value of the foreign currency decreases, your earnings in Indian currency might take a direct hit.

The best way to avoid exchange rate risk and receive accurate payments is to quote proposals in INR.

Learn more: <a href="https://www.skydo.com/blog/how-much-forex-fees-do-you-pay-on-your-international-transactions?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">How Much Forex Fees Do You Pay on Your International Transactions</a>

"The biggest issue is when I receive a wire: What does it relate to? What invoice specifically or a combination of invoices does it relate to?” — A large company in Chicago during the <a href="https://www.frbservices.org/binaries/content/assets/crsocms/news/research/wire-transfer-research.pdf">B2B Wire Transfer Payments Study</a> commented.

Receiving global payments through wire transfer does not provide much remittance information, making it difficult to reconcile payments with invoices, especially if multiple invoices are sent to a single client.

According to a <a href="https://www.frbservices.org/binaries/content/assets/crsocms/news/research/wire-transfer-research.pdf">study</a>, 94% of people consider remittance information valuable. However, cross border payment solutions often fail to provide this information, leading to extra manual efforts.

A seamless customer experience is the backbone of an efficient global payment system. However, business owners and account managers are forced to spend time choosing the suitable currency, dealing with currency exchange rates and resolving language barriers on cross-border payment platforms.

Moreover, businesses often have to worry about data security, facing regulatory challenges, payment delays and hidden charges, making the whole process cumbersome.

Learn more: <a href="https://www.skydo.com/blog/don't-stay-in-the-dark-anymore-monitor-your-international-payments-from-sender-account-to-your-account?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Don’t Stay in the Dark Anymore: Monitor Your International Payments From Sender Account to Your Account</a>

Another issue with cross border payment solutions is the disruption of digital payments through technical glitches, downtime, or software failures. This can lead to delays or failure in receiving global payments. It further results in loss of revenue, extra transaction charges, operational inefficiencies, and customer dissatisfaction.

However, you can mitigate the risk caused by downtime by creating a contingency fund that they can use in emergencies. You must also recommend negotiating the payment terms with the customers and vendors to receive advance payments.

The world is witnessing an <a href="https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/the%202022%20mckinsey%20global%20payments%20report/the-2022-mckinsey-global-payments-report.pdf">embedded finance revolution</a> where individual consumers and businesses are not relying solely on banks for their financing needs. Finding the most suitable payment gateway becomes more stressful. Here is a quick and simple guide to help you shortlist the ideal cross border payment solutions for your business.

When onboarding vendors, it's crucial to assess if they can effectively address your unique business challenges and contribute to your growth.

You can understand payment gateways like a business vendor or a partner. However, before collaborating with them, you should evaluate your business requirements, such as the frequency, volume and nature of payment transactions, and your business goals.&nbsp;

You should also consider or explore payment gateways to assess various aspects like credit card acceptance, online checkout experience, transaction volume, security, international transactions, returns, and integration with your e-commerce platform.

A seamless returns and refunds process through the payment gateway can enhance customer satisfaction.

Assess the payment gateway's integration with your e-commerce platform to ensure smooth data flow between systems.

Evaluate the reporting and analytics features provided by the payment gateway for informed business decision-making.

Consider the quality of customer support offered by the payment gateway as it can be crucial in resolving issues promptly.

Understand the fee structure associated with the payment gateway, including setup and transaction fees, to align it with your budget.

Ensure the payment gateway can accommodate your business's future growth without significant disruptions.

Once you assess your business needs, you must choose the right payment gateway whose features align with your business requirements.&nbsp;

One of the best ways to do this is to conduct comprehensive market research, shortlist popular payment gateway providers, and consider the pros and cons and the features offered by the service providers.

To ensure that cross border payment solutions offer a frictionless payment journey, you can consider factors like transaction fees, quick customer support, and simple integration into your existing accounting system.

A key feature of embedded finance is that non-financial customers get easy access to financial products and technologies. It may, however, serve as a drawback for business owners who are unaware of fintech products or technologies.

Hence, before you integrate cross border payment solutions, you can consult business advisors or financial experts to find the ideal payment gateway for your business. They can assess your business needs, do risk assessment, and cost analysis, and ensure that the platform solves the regulatory challenges.



How Uniqueside.io found the right cross-border payment solution with Skydo

In July 2023, Manoj Ahirwar, Founder, <a href="http://uniqueside.io/">Uniqueside.io</a> embarked on a new journey as he left his job in Singapore to start his software development company, Uniqueside. The dream was taking shape, but a significant hurdle awaited me in the realm of payment platforms.&nbsp;

His first client payment through PayPal was cut down by hefty fees, leaving him with just $2,850 out of a $3,000 payment. This substantial loss prompted him to search for a more cost-effective and efficient solution to accept payments from the United States.

This quest led me to <a href="https://www.skydo.com/blog/top_5_wise_alternatives_for_international_payment">Wise</a>, a platform promising lower fees. However, while Wise's user interface was impressive, its data functionality left much to be desired. Moreover, obtaining the Foreign Inward Remittance Certificate (FIRC) proved complex and time-consuming.&nbsp;

In September, he acquired another client, and his troubles with Wise escalated. Attempting to set up a Wise account for the new client led to a frustrating 10-day project delay. He took to Twitter to share his woes, hoping to find a better solution.

<a href="https://twitter.com/manoj_ahi/status/1709642671718039945?t=Vbmh_1dikntVvvnetmReZg&amp;s=19">His tweet</a>&nbsp;caught the attention of the Google algorithm, which began suggesting alternative payment platforms. It was through this recommendation that he stumbled upon Skydo.

"Skydo has been a game-changer for my software development company, Uniqueside. After struggling with exorbitant fees and inefficiencies on other payment platforms, I stumbled upon Skydo, and it was a breath of fresh air. The onboarding process was smooth, the user interface was top-notch, and the team was receptive to user feedback.&nbsp;

Skydo has saved me money and valuable time, allowing me to provide better service to my clients. It has become my primary payment platform, and I couldn't be happier with the decision. Skydo has become an invaluable partner in the success of Uniqueside."

Currency exchange fluctuations, conversion fees, and complex regulatory challenges create potential delays, making cross-border payments nothing less than a nightmare for businesses.

Cross-border payment solutions enable businesses to expand their business globally. However, despite the various benefits, they also pose significant challenges for businesses, making it difficult to manage their core business activities. Hence, choosing the right payment gateway not only improves efficiency but also helps you save on extra costs.

One-stop cross-border payment solutions like Skydo streamline global payments and rescue businesses from getting entangled in the web of regulatory challenges.

<a href="https://www.skydo.com/?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=demo_click">Request a demo</a> with Skydo to receive cross-border payments seamlessly and unlock global opportunities for your business!

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Facilitating international transactions as an international business is as common as sipping a morning coffee. Yet, they must navigate a hidden financial obstacle: Forex markups. These stealthy charges on foreign exchanges can silently chip away at a company's profits, leaving you blindsided by unexpected costs.&nbsp;

Picture this - you've just closed an excellent business deal overseas, only to see a large chunk of your earnings disappear due to hidden fees. This is the danger of Forex markups; many times, these fees are hidden, until it's too late. These charges appear minimal at first look but add up quickly, resulting in much higher costs for businesses of all sizes.&nbsp;

These hidden expenses lurk at every step, whether you're a multinational company procuring supplies from overseas or an IT export startup paying distant developers in a different currency. But what if there was a way to bypass those unexpected fees, reduce lengthy wait times, and sidestep cumbersome paperwork?&nbsp;

<a href="https://www.skydo.com/?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=demo_click">Skydo</a> makes it easier for businesses to identify and reduce hidden costs to keep more profits. Here’s how.

An issue that frequently arises in international trade is managing <a href="https://www.skydo.com/blog/future-of-cross-border-payments-2030-and-beyond?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">cross-border payments</a>. With their complex fee structures and lengthy processes, traditional banks have been the default choice yet completely outdated. Enter Skydo, a platform designed to alleviate these issues and promote transparency and efficiency.

When you receive an international payment via Skydo, you get real-time exchange rates for your transactions. This way, you get the most accurate and competitive rate in the market without any <a href="https://www.skydo.com/blog/hidden-fees-in-bank-rates?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">hidden charges</a> while achieving complete value for money on your transaction.

Our straightforward pricing model makes it easy for you to forecast your expenses. For transactions under USD 2,000, a fee of USD 19 is applied. For those exceeding this threshold, the fee is USD 29. With our transparent approach, you can have peace of mind knowing exactly what you're paying for.

Imagine the savings your business could achieve by eliminating the cumulative costs of traditional banks for international transactions! With Skydo's currency conversions, businesses can save up to 10 lakhs annually. Don't just take our word for it; verify these savings using our<a href="http://bit.ly/3MOk7P0"> convenient savings calculator</a>.&nbsp;

The Skydo platform is meticulously designed to cater to global and emerging enterprises' needs. Our user-friendly interface offers a seamless experience, making international transactions straightforward and efficient.&nbsp;

With Skydo, setting up an international account is quick and hassle-free. In just 5 minutes, you can establish an account that upholds the highest legal compliance standards. No more lengthy processes, only business agility.

Skydo streamlines the entire payment process and brings transparency, cost savings, and unparalleled ease of use. With a range of innovative features, Skydo is the modern solution to age-old payment challenges. Here's the step-by-step process that makes cross-border transactions hassle-free and profitable for your business.

Step 1: Setting up your international bank account

With Skydo, it's a breezy <a href="https://www.skydo.com/blog/seamless-payment-experience-with-international-bank-accounts?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=demo_click">5-minute</a> affair. All it takes is a straightforward KYC process, entering your business details, uploading a few documents and voilà, you're ready to roll.

Need to bill your clients? Create and send professional invoices at zero cost. With Skydo, invoicing isn't just free; it's incredibly intuitive.  

<a href="https://www.skydo.com/blog/transforming-your-invoicing-experience-with-skydo?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Click here</a> to learn more about how to use Skydo’s invoicing tool free of cost.

Let your customer take the stage. They make local payments, enjoying the comfort and confidence of dealing within their region.

Step 4: Hello, Skydo international accounts

As soon as your client completes the payment, the funds are securely tucked in your Skydo international account, ready for the next move.

The funds begin their voyage, moving smoothly to Skydo's trusted bank partners in India.

Your money gets converted into INR. Rest assured, it's getting the best rates in town.

Step 7: A Warm welcome to your Indian bank account

Without much ado, the money finds its way to your Indian bank account, ready for you to use as you see fit.

An added service most valued by our customers–you get your FIRA and Skydo payment receipts generated, keeping everything above board and crystal clear.

In an era where clarity and transparency are essential, Skydo is leading the charge to set new standards for global financial transactions. With this innovative payments platform, you're not just adopting a system – you're joining a movement towards open, honest dealings.&nbsp;

See the difference firsthand with a <a href="https://www.skydo.com/?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=demo_click">quick demo</a>. Experience the Skydo advantage and be at the forefront of this transformative trend in cross-border payments.

Q1. What are Forex markups, and how do they impact international business transactions?

Ans: Forex markups refer to the additional charges imposed on currency conversion in international transactions. They impact businesses by increasing costs, affecting profit margins, and potentially deterring international trade.

Q2. What steps can businesses take to identify and reduce hidden costs in international transactions?

Ans: Businesses can identify hidden costs in international transactions by thoroughly reviewing contracts, understanding exchange rate mechanisms, and leveraging technology to track transaction fees and fluctuations in currency values.

Q3. How can I assess the true cost of Forex fees on my international transactions?

Ans: To assess the true cost of Forex fees, businesses should calculate the total expenses, including transaction fees, currency conversion charges, and any other associated costs incurred during international transactions.

Q4. What types of Forex fees should I be aware of beyond transaction fees?

Ans: Beyond transaction fees, businesses should be aware of additional Forex fees, such as spread costs, intermediary bank charges, and potential regulatory fees, which can contribute to the overall expense of international transactions.

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The increased adoption of digital payments has catalysed a movement towards a cashless society. Electronic payments grew by <a href="https://www.mckinsey.com/industries/financial-services/our-insights/the-chessboard-rearranged-rethinking-the-next-moves-in-global-payments">19% in 2021</a>, and the <a href="https://www.fisglobal.com/en/global-payments-report">2022 FIS Global Payments Report</a> predicts that this rapid digitalisation will bring down cash usage to 9.8% in 2025 from 17.9% in 2021. The convenience, speed, and hygiene benefits of digital payments have appealed to consumers and will consequently lead to a decline in cash usage.&nbsp;

To reinvent themselves to the changing landscape, Payment Service Providers (PSPs), Financial institutions (FIs), merchants, and corporations are attempting a shapeshift to deliver on customer expectations through innovative and efficient solutions.&nbsp;&nbsp;

This intersection of factors has resulted in new trends emerging in the global payments landscape. This article takes a deep dive into the trends that will drive value in the future.&nbsp;

Real-time payments are transactions that are processed and settled instantly, providing immediate availability of funds to the recipient. Unlike traditional payment methods that involve delays and batch processing, real-time payments enable businesses to send and receive funds in a matter of seconds, even across different financial institutions.

These payments have emerged as a growing trend in business transactions, revolutionising payment processes and enhancing the efficiency and speed of financial transactions. The Q2 of 2022 saw <a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/real-time-payment-networks-grow-but-banks-still-search-for-uses-72411002">15% of the total volume</a> on The Clearing House’s RTP network going to instant payroll.&nbsp;

As an IT export service provider, you often operate in a dynamic environment, delivering services remotely and engaging with clients globally. Real-time payments enable you to receive payments promptly, eliminating delays and providing immediate confirmation of successful transactions. This improves cash flow and allows you to focus on delivering exceptional services without being hindered by payment processing bottlenecks.

Small businesses, especially, are finding real-time payments a boon as they enhance cyber security and fraud detection, and improve <a href="https://www.skydo.com/blog/customer-journey-mapping-the-secret-sauce-of-global-companies?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">customer experience</a> and overall financial management.&nbsp;&nbsp;&nbsp;&nbsp;

Cryptocurrencies and Blockchain in Instant Global Payments

Blockchain technology is a decentralised, distributed ledger that records transactions across multiple computers, providing transparency, stability, and security. Cryptocurrencies, such as Bitcoin and Ethereum, are digital assets that leverage blockchain technology as a means of exchange and store of value.

Cryptocurrencies have been gaining prominence as alternative payment modes. Thousands of merchants accept Bitcoin as a payment mode today, and a few countries such as El Salvador and the Central African Republic (CAR) have accepted Bitcoin as a legal tender. Similarly, blockchain-based payments are also gaining prominence, especially in cross-border payments.&nbsp;

However, certain challenges and considerations for <a href="https://www.skydo.com/blog/decoding-withholding-tax-an-i-t-export-service-providers-toolkit-for-simplifying-international-payments?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">IT export service</a> providers in using blockchain technology and cryptocurrencies for cross-border payments are regulatory compliance and cryptocurrency volatility.

<a href="https://www.pymnts.com/study/cryptocurrency-blockchain-and-cross-border-payments-business-digital-innovation/">58% of cross-border</a> businesses use at least one cryptocurrency, and 56% use blockchain technology. Another report finds that <a href="https://www.pymnts.com/study/cryptocurrency-blockchain-and-cross-border-payments-business-digital-innovation/">61% of FIs</a> realise the need to offer access to cryptocurrency payments, but only 10% support such decentralised payments.&nbsp;

Thus, while blockchain technology and cryptocurrencies can change the face of cross-border payments, it’s important to consider the challenges to making an informed payment-related decision.

Harnessing the Power of Artificial Intelligence and Machine Learning in Payment Processing

AI and ML analyse vast amounts of transactional data to identify patterns and detect emerging ones to improve security, fraud detection, and risk assessment. Chatbots for automated customer service support is another use case where AI and ML are finding utility in payments.&nbsp;

The FinTech industry is increasingly using AI and <a href="https://scientificasia.net/machine-learning-ml/">machine learning</a> technologies to enhance payment processes by automating data analysis for quicker and more accurate customer insights. By leveraging<a href="https://www.openxcell.com/ai-solutions-for-fintech/"> AI in fintechs</a>, organisations can efficiently improve the accuracy of the predictions for improved decision-making.&nbsp;

IT service exporters can develop and deploy AI-powered solutions that enhance payment security, optimize risk management, and deliver exceptional customer experiences. They can leverage these technologies to build intelligent payment systems, integrate fraud detection capabilities, and develop advanced analytics tools for risk assessment. You can also consider partnering with a payment gateway like <a href="https://www.skydo.com/?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=demo_click">Skydo</a> that provides all these features and more.

By embracing AI and machine learning, IT service providers can differentiate themselves in the market, attract new clients, and provide innovative solutions to businesses in the payments industry.

An outcome of the global pandemic is the increasing use of contactless payment facilities, where Australia was the<a href="https://www.visa.gp/visa-everywhere/innovation/contactless-payments-around-the-globe.html"> biggest market for contactless cards at 92%</a> market share. This shift towards a more seamless and practical payment method affects how businesses and IT service providers shape the ultimate customer experience around digital payments.

The transactions using contactless payments are quicker, safer, and more convenient. You simply need to tap your card or phone, and the transaction occurs. Besides cards, digital wallets, and online payment apps like Apple Pay, Google Pay, etc., have driven up digital payments and led to a sharp decline in cash-led payments globally.&nbsp;

For IT service export businesses, embracing contactless payments is crucial to stay competitive and meet customer expectations. By offering contactless payment options, you can provide a seamless and modern payment experience, attracting tech-savvy customers. Contactless payments also enable businesses to streamline operations, reduce cash handling costs, and optimize checkout efficiency.

Considering these benefits, it’s crucial to realign your business to adapt to the change by accepting contactless payments, simplifying checkout procedures, improving security measures, and utilising mobile payment applications.&nbsp;

Innovative P2P payments are emerging as a pivotal trend in the global business landscape, driven by the increasing demand for convenience and streamlined financial transactions.&nbsp;

P2P payment apps like Skydo, PayPal, and Venmo have garnered widespread popularity, with <a href="https://softjourn.com/insights/top-payments-industry-trends">84% of consumers</a> embracing these services. The sector's revenue has surged by over <a href="https://softjourn.com/insights/top-payments-industry-trends">200% in the past decade</a>, reflecting a robust growth trajectory. Notably, the development of P2P payment apps is poised to be a lucrative venture in 2023, especially in retail, financial institutions, telecommunications, logistics, and tech sectors.&nbsp;

This trend encompasses diverse applications, including cryptocurrency transfers, non-commercial fundraising apps, and P2P loans, reshaping the dynamics of global transactions.

Understanding Regulatory Changes in Global Payments

Multiple changes in regulatory frameworks such as BASEL III norms, PSD2, Single Euro Payments Area (SEPA), etc., have driven the core Automated Clearing House (ACH) to the <a href="https://www.skydo.com/blog/real-time-tracking-of-international-payments?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">real-time payments system</a>. 54 countries use real-time payment systems today and continue to modernise the financial and payments ecosystem led by regulatory support.&nbsp;

ISO 20022 was introduced by the <a href="https://www.skydo.com/blog/why-was-a-certain-amount-deducted-from-my-swift-payment?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">SWIFT</a> network in 2004 to overlook cross-border payments. However, its adoption has lagged over time and requires immediate attention to eliminate the vulnerabilities caused by the unstructured nature of data in digital payments.

Implementing ISO 20022 can enable seamless and automated reconciliation, cover payment initiation and interbank settlement, and mitigate transaction risks.&nbsp;&nbsp;

Unfortunately, only <a href="https://prod.ucwe.capgemini.com/wp-content/uploads/2023/01/Top-Trends-Payments-2023.pdf">10% of international transactions</a> go through a compliance check, states SWIFT. IT export services businesses must realise that regulatory frameworks would only help make the system more robust and secure. Providers must comply with regulations to retain customers' trust, foster accountability and transparency, and build cost-effective solutions.&nbsp;

Embedded Finance: A New Frontier in IT Services

Embedded finance is a fast-growing payment trend, especially for non-financial businesses. The history of embedded finance dates back to when e-commerce sites like Amazon integrated payments into their checkout flow. Today, the concept has expanded to include innovative payment solutions like Buy Now, Pay Later (BNPL).&nbsp;

Lending and insurance platforms also adapt their offerings to integrate embedded finance to enhance customer experience. Embedded finance is soon going to a $700 billion-worth industry.

There are many opportunities for IT service providers to integrate financing with payments at the point of delivery to the customers. Zero-interest fees and flexible repayment plans have led to more customers seeking a convenient, secure and easy way to finance their purchases while still shopping on an e-commerce platform.&nbsp;

Businesses are banking on this opportunity to develop next-generation models with underwriting models to serve customers with different credit ratings. For instance, <a href="https://www.ir.com/guides/trends-in-payments">65% of businesses</a> planned to add BNPL as a payment method in 2022.&nbsp;&nbsp;&nbsp;

Some IT service providers have introduced debit and reward programs with attractive terms and conditions to encourage adoption. Other ways businesses are bringing embedded finance into play include improving customer relationships, broadening services, offering loans and brokerage accounts, and facilitating crypto payments.&nbsp;

IT service providers play a vital role in this evolving payments technology landscape, as they have the expertise and capabilities to support businesses in embracing these changes. They can help clients integrate real-time payment solutions, leverage blockchain technology, enhance security through AI and machine learning, and facilitate the adoption of contactless payment systems.&nbsp;

By staying informed about payment trends, regulatory changes, and emerging technologies, IT service providers can position themselves as trusted partners and navigate the dynamic payment landscape effectively.

For IT export service providers operating in India, the context is particularly significant. India has witnessed a rapid digital transformation in recent years as online currencies have become more common in recent years. Initiatives like the Unified Payments Interface (UPI) driving the adoption of digital payments.&nbsp;

You should be at the forefront of exploring innovative global payment solutions, adapting to regulatory changes such as data protection and open banking, and embracing the benefits of digital payments and emerging technologies.

In this changing landscape, the call to action for IT service providers is clear. It is essential to proactively explore and understand innovative payment solutions, regulatory requirements, and emerging trends.&nbsp;

If you are an IT export services provider in India, seize the opportunity to explore global payment trends, understand regulatory changes, and establish yourselves as a trusted partner in this evolving landscape.

Ans: Global payments refer to financial transactions conducted across international borders, involving the transfer of funds or assets between parties in different countries.

Ans: Global payments work through electronic systems that facilitate the transfer of funds between individuals, businesses, or financial institutions across the world, often involving currency conversions and compliance with international regulations.

Q3.Why Do You Think There Is a Need for More Regulation of Global Payments Companies?

Ans: Increased regulation of global payments companies is essential to ensure transparency, security, and compliance with anti-money laundering laws, preventing financial crimes and protecting consumers globally.

Ans: A global payment system is a network that enables the transfer of money or value between individuals, businesses, or financial institutions internationally, typically involving various payment methods and currencies.

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