How NGOs can choose the best cross-border payment service provider 

Maybe it’s time for non-governmental organizations to look beyond banks to support their important work.

Banks have generally been the default entry point into financial services – as they are for many business sectors. NGOs are familiar with banks and may be comfortable with their existing relationships. However, the feeling may not be mutual…

Banks may be unwilling or unable to deal with everyday NGO challenges. For example, conducting sanctions screening and anti-financial crime checks against the backdrop of civil or political unrest. Or transfer funds to difficult-to-reach countries while managing their own correspondent banking relationships and perceived NGO risk.

Viable alternatives

Modern cross-border payment service providers, or PSPs for short, are making the flow of global payments faster, easier and more cost-effective.

Non-bank providers have built their own networks to rival SWIFT. They have the reach to link NGO destination and origin countries. Because they handle funds, they’re usually regulated entities.

This means they have the same obligations as banks around compliance and anti-financial crime controls. Donors and other stakeholders can have confidence about the safety of their funds and the working practices of regulated PSPs.

With that in mind, here are five things to look out for when selecting a cross-border PSP. 

1. Coverage and capabilities

Understand the geographic reach of potential partners. From which countries can you make pay-ins and pay-outs? Clearly, any partner should be able to cover your existing transfer corridors, plus enable new ones.

Discuss your plans, needs and challenges. Include future aspirations and as much detail around the type of work you want to be doing in the future. This will enable providers to devise a proposition that makes sense to your NGO, and help you assess best fit.

Consider not only what coverage and capabilities a provider has today, but also how they plan to develop their platform and road map. Which countries and territories do they plan to serve? Importantly, do they plan to pull out of any countries critical to your work?

How Inpay has it covered…

Inpay is everywhere you want to be. We’ve built a proprietary network with banks and financial institutions in more than 200 countries to make sending international payments as simple and efficient as local bank transfers.

2. Knowledge and support

Domestic banks don’t provide the true consultative service that NGOs desperately need – because they’re not necessarily set up to do so. They’re not experts on other countries’ banking infrastructure. Or on specific payment corridors and what’s needed to move transactions along.

Establish how much NGO sector experience and expertise a potential payment partner has. Can they offer guidance on the documentation required, the questions likely to be asked, the quickest and most cost-effective way to route payments to pre-empt problems? What’s their payment approval rate?

How Inpay assists…

Inpay was founded following a humanitarian crisis in 2008. Our origin story is bound up with the NGO sector. Over the last 15 years, we’ve gained an electronic money license (EMI) and become regulated by the Danish FSA. We’ve also honed our skills on everything from payment routing to sanctions screening, resulting in industry-leading transaction success rates.

3. Speed

Cross-border payment can take days, weeks or even months, due to legacy technology platforms, a lack of standardization and just how correspondent banking works. Generally, the more banks involved, the slower and more expensive the transfer.

Ask a potential payment partner about transaction speed for transfer corridors important to your NGO. Some PSPs can receive funds in any currency and pay out locally in real-time 24x7x365. That’s in countries with an instant payment infrastructure, or offer near-instant settlement elsewhere.

How Inpay gets moving…

Inpay speeds up payment from T7-3 to T0, by making cross-border payments as quick as domestic ones. We’ve effectively built a giant on-us network, where payments take place between Inpay participants. Funds never leave the network, they’re simply re-routed to another account internally. Sometimes transactions are pre-funded.

4. Transparency and traceability

Openness and transparency are essential in philanthropy. More people are encouraged to donate when they can see the tangible change their donations are making in the world.

Donors have greater peace-of-mind when they know that due diligence has been performed on charities. They also want to feel confident that funds will get to the right place with full traceability and transparency. And that this will be cost-effective, so the value of their donation is maximized.

Determine how a potential payment partner can offer transparency and traceability around cross-border payments. Can they track payments easily? Can they move payments along quickly, if they get stuck or go missing?

How Inpay adds value…

Inpay processes complex, individual, cross-border payments with full transparency. It is Danish FSA regulated and compliant in other jurisdictions, conducting recognized anti-money laundering and counter-terrorist financing procedures. Our internal security protocols meet and exceed the strict SWIFT standards.

5. Technology

Generally, NGOs don’t have huge in-house IT development teams. They don’t want to do endless testing, updates and maintenance for each country they want to make payments to. Or spend the time, trouble or expense to becoming payment experts.

Understand how a potential partner has built their technology as well as how they update and develop it. This will inform how quick and easy it is to customize, launch and integrate with your provider. It will also have a direct bearing on resource and cost.