The bigger the connected economy gets, the less effort it takes to join.
In an increasingly interconnected world, cross-border trade is no longer a marginal activity reserved for multinationals. Small and medium-sized enterprises (SMEs), start-ups and even independents are now part of the global marketplace, conducting transactions that span multiple continents and currencies.
They are not alone in doing so. As international transactions accelerate, technological innovations, including those related to artificial intelligence and blockchain, are helping to make business borderless.
This week’s news highlights how a simpler, more efficient and seamless cross-border experience is a priority for growing businesses.
Amazonfor example, is to add a fully managed global environment supply chain option to its suite of supply chain services for sellers by the end of the year. In the meantime, Bank for International Settlements recruited JP Morgan Chase, German Bank, UBS, Visa And MasterCard for one blockchaintechnology-based cross-border payments pilot. And Apple brings his Apple Information services, including AI translation, into more languages.
These technologies, along with advances in the payments industry such as accounts payable (AP) and accounts receivable (AR) automationnot only reduce the complexity and costs associated with international transactions, but also open up new opportunities for businesses to engage in the global marketplace.
Read also: The cost of cross-border payments could be reduced with blockchain, if only it could solve the problem of scale
Breaking traditional barriers through innovation
From AI translators that facilitate communication between international partners to blockchain technologies such as smart contracts and tokenized payments that streamline and secure financial processes, the landscape of global trade is evolving.
Historically, the cross-border payments market was dominated by a handful of dominant correspondent banks, with little competition and little innovation. For smaller businesses, this operating environment made it difficult to expand and capture market share internationally.
Managing multiple currencies is one of the most time-consuming tasks for businesses engaged in cross-border trade. Traditional accounts payable and receivable management systems often involve manual processes, are error-prone, and can be slow to adapt to currency fluctuations. This is particularly problematic for SMEs that lack the resources to support sophisticated financial services.
However, continued and increasingly powerful advances in payment automation, robotic process automation (RPA), and AI have the potential to automate currency conversionsensure compliance with local tax regulations and optimize payment schedules based on exchange rates.
For example, next-generation payment systems can automatically match invoices to payments, reconcile financial discrepancies, and flag unusual activity that could suggest fraud or payment errors. This allows businesses to reduce their reliance on manual reconciliation, which not only saves time but also improves accuracy and financial control.
The ability to process payments and receive revenue in multiple currencies without costly third-party intermediaries allows businesses to operate more profitably.
As PYMNTS Intelligence reports, “Cross-border sales and the challenge of payment failures“Faulty cross-border payments cost U.S. merchants at least $3.8 billion in sales last year, according to the revelations.
However, it is essential for businesses to ensure that these systems are transparent, reliable and secure. to take full advantage of it.
Simplify financial complexities and unlock working capital
Cryptocurrencies, long viewed with skepticism by the traditional financial sector, are increasingly being seen as a viable means of payment in cross-border trade. The adoption of blockchain technology and stablecoins (cryptocurrencies pegged to a stable asset, such as the U.S. dollar) has mitigated much of the volatility that initially deterred businesses from adopting the industry’s solutions.
The PYMNTS Intelligence Report “Can blockchain solve the cross-border payments puzzle?“explored how blockchain could revolutionize cross-border payments, assessed its current adoption, and examined future implications for financial institutions and businesses.
The report reveals that cryptocurrencies offer several advantages to businesses, particularly in cross-border transactions. Traditional payment methods, such as wire transfers or credit card payments, can take several days to process and incur high fees, especially when currency conversions are involved. Adopting cross-border blockchain solutions, on the other hand, enables near-instant transactions at a fraction of the cost, making them particularly attractive to businesses operating in countries with unstable currencies or high inflation.
However, concerns about blockchain regulatory uncertainty, particularly cryptocurrency payments and the use of blockchain in legal agreements, remain a risk to be mitigated. Different countries have different regulatory frameworks and it can be difficult for businesses to navigate this patchwork of rules.
One of the most immediate challenges of cross-border trade is language. Whether communicating with suppliers, negotiating contracts, or navigating foreign regulations, language barriers can slow down or even derail transactions. While human translators have long been a solution, the rise of AI-powered translation tools is increasingly offering businesses a faster, more scalable option.
As AI and blockchain evolve, their combined potential will likely lead to even more sophisticated and transparent cross-border solutions. For businesses willing to embrace these innovations, the future of global trade could be very bright—provided it is operated responsibly.
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