A global payments system allows companies and marketplaces around the world to make and receive cross-border payments in multiple, certified international currencies.
Although currencies may vary between payment services, these systems enable international payment solutions – even more critical in recent years.
The definition of a payment system is, ‘any system used to settle financial transactions through the transfer of monetary value. This includes the institutions, instruments, people, rules, procedures, standards, and technologies that make its exchanges possible’.
The ‘global’ element comes into play when the sole supplier, vendor, company, or marketplace has a bank account in a different country to the one in which the business is based in.
Global payment processing involves multiple steps.
First, a legal entity needs to be set up in every country that a company operates in. Next, the money must be transferred internationally. This incurs charges which will differ depending on the transfer provider. To pay employees abroad, the money needs to first be transferred to a local bank account then processed for payroll.
Without a global payment processor, companies have to make sure pay rates are accurately calculated which can be challenging due to constantly wavering exchange rates.
Global payment systems automatically convert currencies which ensures recipients receive the correct sum.
Global payments system acts as the intermediary between the buyer and the seller, upholding the integrity and confidentiality of:
A global payments system is classed as a SaaS (Software as a Service), offering a relatively cheap option for vendors to carry out their business without having to dedicate a lot of time or resources to develop their own payment processing system. Operating as a SaaS, such systems usually price depending on the rate of transactions being actioned, business type, and industry.
Transactions and payments can happen physically with credit or debit cards on a card reader, or through online transactions via a bank or private vendor using a virtual payment system to facilitate and secure payments.
Reports of transaction amounts, who the vendor and buyer were, the geographical location of where the transactions took place, and any fraud attempts are kept on behalf of the Payment Service. However, they can be retrieved by the vendor, company, or business. This offers full transparency, earning insights and the peace of mind that the transaction history can be retrieved if needed.
In the case that something was to go wrong; such as a transaction fails, a fraud attempt is detected, or something unforeseen happens, the exact cause of what went wrong can be identified by local and online support teams, which is typically offered as part of the SaaS package.
Usage and popularity of global payments have steadily been growing year upon year, so without a secure and efficient global payments method to facilitate these transactions, businesses would cease to function.
2020 saw the highest number of new companies created since 2011, even with the pandemic affecting businesses and online marketplaces in all industries on a global scale. This provides factual evidence that even with the state of the world, international payment systems are an essential piece of the puzzle that ensure online payments and cross border transactions can take place.
Imburse provides businesses with the freedom to grow, and establish new and empowering partnerships. Payment solutions have been a challenge for insurance companies in particular, however, we help insurers overcome this. We supply the flexibility to add any payment provider, within minutes, in a straightforward manner.
Payments are mission critical for insurers, and through the Imburse platform, they can more easily set up alternative payment methods to create the best customer experience. This includes bank digital, digital wallet, credit cards, vouchers, and more.
For secure and easy global payments, get in touch with our team today.
Some of the global payments vendors include Stripe, GoCardless, PayPal, and Adyen. These are a handful of the vendors included in the Imburse marketplace, enabling insurers in particular to achieve international payment for claim payouts and premium collections.
Editor’s note: This article was originally published on the 22nd of January 2021 and has since been updated for comprehensiveness.