Why a high-level payments partner is vital for spend management platforms to go global

7 Minute read
1 year ago

Over the last decade, a new and exciting range of software has emerged to help businesses modernize and automate employee and department spending: spend management platforms. With their help, finance teams can now manage and reimburse receipts and expenses in a frictionless, digital fashion.

But in the years following the pandemic, the world of work has transformed drastically. The emergence of remote and global teams expanded international supplier and partner bases, and a new approach to travel and wider economic uncertainty means that today, the spend management needs of finance teams are more complex than ever before.

This has seen many platforms evolve well beyond simply automating reimbursements.

As such, teams’ reliance on spend management platforms has increased, more options have emerged, and the market is growing. Fast. Between 2022 and 2029, it’s projected to reach $39.05 billion in 2029, at a CAGR of 11.1%.

But this is more than just a domestic opportunity. The world’s biggest spend management platforms may be predominantly U.S., U.K., and E.U. based, but this new approach to work is a global phenomenon. And the platforms that are able to expand globally first can carve out a huge competitive advantage.

However, entering a new market comes with new challenges, nearly all of them payment related, and not all platforms have the payments infrastructure to go global. In this blog, we’ll explain what those challenges are and how a high-level payments partner can help platforms successfully navigate them and become a truly global enterprise.

Global expansion payment challenges

New payment landscapes

Platforms looking to expand globally need to be aware that different geographies often have entirely different payment cultures and the payment infrastructure that works at home may not be fit for purpose abroad.

Take Latin America. According to the World Bank, the presence of a large informal economy, mistrust of incumbent economic systems, and skepticism of the high fees and interest rates of debit and credit cards mean that  45% of the region remains unbanked. A culture of alternative payments like digital wallets is growing fast, but sending and receiving payments within, to and from Latin America can be complicated and slow. Many businesses outside the region lack the tools for local payment acceptance. 

It’s a similar story across the APAC region, where 29% of the region don’t have a bank account. The payments ecosystem is driven primarily by super apps such as WeChat, Alipay, GCash, GrabPay, LINEPay, OVO and Paytm. Again, many platforms will lack the tools to expand into one of these countries, let alone a whole region.

A truly localized payment offering should provide real-time payments in multiple currencies via local and international payment rails and be entirely compliant with local regulations and have access to competitive foreign exchange rates.

More cross-border payments

With the combination of global expansion and newly remote and global teams, the number of cross-border payments will inevitably increase. For businesses and employees, this increases the need for good FX rates and cross-border payments that avoid the charges and delays accrued by traditional transfers.

Despite this, 80% of firms report experiencing challenges when paying their international workers. This, in turn, drives more firms to use costly private agencies to help with worker hiring and management. 

Go global with the right payments partner

The global spend management market is only going to grow. And while the domestic market may be becoming oversaturated, there are huge opportunities overseas for the platforms that can not only expand but innovate and scale once they have done so.

With the right payments partner, not only can platforms remove the burdens of regulatory complexities, they can also lay the foundations to quickly scale their platform to meet the needs of their new markets.

This is where Nium can help. Nium’s comprehensive suite of APIs enables platforms to offer overseas businesses multiple modern money spend management services including:
  • Cross-border and localized payments. True global connectivity requires building individual links with banks, obtaining payment licenses on a territory-by-territory basis, and optimizing onboarding as well as maintaining that infrastructure in the face of new technology and regulation. Nium has those relationships in place and supports bank-to-bank and wallet payments in over 190 countries, 100 in real-time, 100 currencies, and holds licenses in 11 jurisdictions.
  • Automated and real-time reconciliation. Businesses can streamline and automate their reconciliation by digitizing their entire financial system. With each transaction, Nium automatically logs the transaction, approval history, receipts, and more so businesses no longer have to while providing real-time reimbursements.

    Once this is in place, platforms can target global businesses and businesses with global workforces. They can help clients reimburse employees–no matter where they are located–in real-time, in their chosen currency and to their chosen bank account or wallet.

    Platforms can also support businesses with unbanked employees or suppliers that require payments to be made direct to card, or into digital wallets.

    This is a huge opportunity as businesses of all sizes now have cross-border payment needs, presenting a significant opportunity for platforms. Larger enterprises may need tools that plug into legacy systems and processes, while smaller businesses may not be equipped for the additional lift required for managing cross-border payments.
  • Virtual and physical cards. As teams grow and work remotely, the need for multiple company cards increases. By providing employee expense cards, platforms can help businesses massively optimize their expense management. These changes alone can save businesses time and drastically reduce operational costs, as real-time updates allow companies to track and manage expenses as they happen.

Via Nium, platforms can provide businesses all over the world with physical and virtual Visa cards for employees, complete with spend controls and personal logins.

To learn how to level up your spend management platform, download our new guide, Scaling Spend Management: Intelligent and scalable payments for spend management platforms, or book a call with one of our payments experts.

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