2. Slow transactions
Cross-border payments via a traditional bank transfer normally take between two and five days to process — a very slow turnaround time compared to virtually instant domestic payments. Again, this is because so many entities are involved in a single transaction. For example, if someone from Ukraine wanted to transfer money to Sri Lanka, it may have to go through intermediaries in Russia or Germany, and then India first. With a lengthy series of steps to complete, cross-border payments are often delayed as a result.
How this challenges businesses, banks and other financial institutions
In a world where everyone is looking for the fastest, most convenient services, they won’t be satisfied with a cross-border payment system that is slow and subject to delays. Businesses and consumers have to make international transactions, and the choice is between old, slow, expensive bank transfers, or new payment service providers that offer an instant, cheaper alternative. While international transactions are undeniably more complex, it’s imperative that organizations look to reduce the processing time in order to meet their customers’ expectations.