“People need banking, not banks.” ~ Ranjit Sarai, President’s Choice Financial
The ones who understood this hidden need amongst the customers in India create history and reliable homes for millions to carry out hassle-free and feasible means to collect cross border payments locally in India.
- Your uncle is in the US, and he wishes to send $1000 to his niece in India for her birthday. Do you have a cost-efficient option?
- As a freelancer situated in India, you got a client from Japan and will send you payment in Yen. Do you have the right tool that can facilitate both receiving or withdrawing funds in JPY or INR?
- You are an Amazon seller in India selling your products in Australia. As a seller, do you own a feasible cross border payment solution that supports AUD?
- Want to pay taxes, but stress over currency conversion. Do you have a helpful payment solution to dissolve the stress?
These are a handful of cross border necessities that one could have in India.
As nations are growing in various genres such as technology, trade, payments, inventions, and employment openings, we humans have leaped from analog to digital era where digital is the key to an impromptu future.
If we talk of payments, the bank was the only option to send and receive the payment (national or international payment).
Gradually we shifted from banks to mobile phones that enabled digital transfer. And today, thousands of payment service providers facilitate a secure, credible, and transparent payment (national and international) that completes the payment process in a minute with a few taps.
Earlier, the cross border payments that took hours now happen in a blink of an eye. But, how?
How Do Cross Border Payments Work?
We don’t know whether it triggers curiosity in you or not, but it pushes us to understand how this complex technology enables the time taking cross border payment without any hassle.
Cross border payments work in the following chronology:
- For instance, you are an Amazon Seller in India selling organic products in the US. Now, a US customer purchases your product and proceeds to the payment section to fill in the details (name and card details).
- In the second stage, the payment processor will reach out to the payee’s bank account to check whether the account has needed funds and whether their account is legitimate or not.
- Once the payment processor checks for both the details, payment initiation begins, later notification is sent to both recipient and payee for receiving and deduction of money into their local accounts.
It took time for you to read and understand the cycle, but this whole process begins and ends in 3-5 seconds. Technology has changed the turf in many genres.
With growing technology, we are no more limited to wire transfer and credit/debit card payments. With growing impatience and the need for instantness in human life, fintech has introduced different types of intriguing payment methods.
What are the Types of Cross Border Payments?
Ever paid for anything with just a gesture? Sounds weird?
Well, it isn’t because fintech has evolved and is introducing revolutionary tools for payment. The following are the different types of payment methods:
It is a traditional and still used payment method. Some people still prefer banks to transfer money because banks shall always hold a tag of credibility and security in their minds, as banks have been surviving and still running for centuries.
If we talk about the current scenario, many people don’t hold much cash because of the shift to the e-payments era. Moreover, the hit of COVID-19 pushed many Indians to change their payment turf from offline to online to encourage social distancing and no-contact payments.
Contactless Card Payment
In this payment method, the payee enters their name, card number, CVV, and expiry date to make a cross border payment. It is the most common payment method.
But, card payments in India will face changes in the new year as the Reserve Bank of India is all set to introduce some dramatic changes for e-commerce biggies such as Amazon and Flipkart.
Once the changes are implied the e-commerce moguls would not be allowed to store the details of the payee’s card that earlier helped in faster transactions (as it was recurring). Moreover, the card details will be replaced with a unique token which will dissolve the need to store card details on any e-commerce portal.
What is a Unique Token?
A unique token is like a key made with an amalgamation of the relevant card, the token requester, and the device that places the request.
Moreover, renowned card issuing companies such as Visa and Mastercard will function as Token Service Providers (TSPs) and provide tokens to e-commerce platforms and mobile-friendly payments. This dramatic change will scrap the need for sharing the card number and CVV.
It is one of the largest used payment methods for both national and international payment because it is quick, the bank is connected, and mobile-friendly.
Most of the Indians use UPI payment for local or national money transfers such as:
- Payments at stores
- Transferring money to a friend,
- Recharge purpose, or
- Sending money to your family situated in different demographics.
UPI got an encouraging kick of growth due to the following aggregators, and they are as follows:
- Removing the transaction charges, merchant discount rate, and payment service provider fees. Before August 2020, banks charged 2.5 rupees on transactions below INR 1,000 and 5 rupees for transactions worth above INR 1,000.
- The daily transaction limit changed from 1 lakh to 2 lakh.
These aggregators paved a wholesome path for UPI, making its transaction value jump from INR 2,162 billion to INR 3,290 billion in 2020.
When the value of UPI went up, card transactions faced a dramatic dip where the transactions decreased from INR 1,511 billion to INR 1,262 billion between January 2020 and September 2020.
Earlier, the digital asset was merely a foreign object to Indians. However, now the scenario has changed where Indian youth is understanding the bitcoin market and investing wisely.
One point to keep in mind is that Bitcoin doesn’t have a ministry watchdog to facilitate a safe transaction or holding of the digital assets. Even though the Crypto industry is volatile and sensitive to changes, over 15 million Indians have invested in cryptocurrencies.
But, the drastic change that India is facing is the change of mindsets. According to Chainalysis, “In India, where households own more than 25,000 tonnes of gold, crypto investments grew from about $923 million in April 2020 to nearly $6.6 billion in May 2021.”
These startling numbers show that India witnessed a dramatic rise of over 612% in the number of cryptocurrency users. Though there is a deficit of regulations and exposure to loss, cryptocurrency is experiencing revolutionary growth in India.
Ways to Collect Cross Border Payments Locally
If you want to conduct cross border payment from one country to another, you should own a reliable, secure, and transparent payment solution that could open a safe door to host a fraud-free transaction.
The following are a few of the best tools that one could use to receive cross border payments locally in India, and they are:
PingPong is a pocket-friendly cross border payment solution that is nothing less than a savior in disguise for millions of Amazon sellers, freelancers, service providers, commoners, and e-commerce merchants.
PingPong stands firm on the following pillars:
- Knowledgeable customer service
Apart from good values, PingPong offers:
- Free signup and zero maintenance fees
- Regulated with the Reserve Bank of India
- Assist you in paying your VAT & GST without any conversion confusion
- Have a conversion calculator that gives the exact amount of what you shall receive after slashing the forex.
- Accept payments in – INR, USD, GBP, EUR, JPY, AUD, MXN, AED, CAD, and SGD.
- Receive a free digital Foreign Inward Remittance Certificate (FIRC) on your PingPong dashboard after every cross border transaction.
- You can handle multiple currency tradings under one umbrella without confusion.
- Pay your vendor and supplier with any confusion.
- All these amenities are available on PingPong at a highly competitive foreign exchange rate.
Another perk of having PingPong as your cross border monetary companion is that it cannot hold your funds. The moment money gets transferred from the payee to the receiver, it immediately hits the Indian account.
The name itself speaks volumes about the brand as they are one of the renowned and most used payment products worldwide. Moreover, PayPal India sees a 40% jump in the value of cross border transactions in April-June 2021.
It has a global presence in over 200 countries, making its services available in over 25 currencies. Even though PayPal is a trusted option for many, it is the best for small-scale businesses and startups.
PayPal is undoubtedly a secure path for transactions, but at times it behaves sensitively. Even a slight check-in glitch from your end will be looked upon as a matter of suspicion, which might end up in freezing your account.
PayPal charges over 4% – 5% foreign exchange. It is one of the major backdrops for them as not every Indian would prefer to spend a decent chunk in the name of forex.
Just like PayPal, this US-based cross border payment solution also has a worldwide presence. Stripe accepts payments worldwide in more than 135 currencies and offers extensive support for local payments.
It is easy to integrate into your marketplaces. It would also be a helpful tool to assist in recurring payments. Moreover, it also helps in invoicing that makes it easier for the recipient to approach the client.
This cross border payment solution enables you to accept payments via:
- QR codes
- Link sharing via social media or SMS
- Blogs or web pages
- Create customizable invoices
- MS Excel sheet
PayU charges 2% + GST for every transaction. If you are using American Express & Diners Cards, then transaction fees will be 3% added with GST for international transactions. The transaction rates are 3% + ₹6 for every transaction.
It is also a renowned payment solution that helps in getting your cross border payment without any hiccups. Payoneer is a haven for freelancers, service providers, e-commerce sellers, and many more.
Payoneer helps you to receive payments in – USD, EUR, GBP, JPY, AUD, CAD, and MXN.
Payoneer also assists in paying your VAT and receives a free digital Foreign Inward Remittance Certificate (FIRC) after every international transaction, which means no more standing in tiring bank queues.
Today, survival means being omnipresent in various countries as competition in every field is increasing. But, being omnipresent also means dealing in multiple currencies based on the laws of the lands.
Therefore, one must always opt for the best cross border payment solution because the fintech industry is changing, and so are the monetary laws in countries, so think wise before jumping to conclusions.