Eliminate payout disruptions with a better local banking infrastructure

Providing local payments saves you and your payees money on foreign exchange and offers faster payouts. The world’s largest global eCommerce marketplaces have long moved away from foreign-exchange based payment processors and have been offering their sellers localized payout options. For small and medium-sized merchants poised to scale, receiving local currency settlements allows them to re-invest into their businesses faster, increase their volumes by selling into more and more geographies and accelerate growth onto those marketplaces.

Redundancy in your banking network is critical to ensuring seamless, scalable growth across global borders. When it comes to being able to offer your payees a frictionless payout experience, you need to be able to support both local currency payments and settlements, regardless of where your business is located. One way to achieve this would be to set up acquiring relationships in every country where your business is selling into. You’d have to maintain in-house treasury and operational teams and manage compliance and regulatory requirements in these regions as well. On top, you’d need to build and maintain the technical infrastructure to manage the copious amount of data coming in and out of your platform. It’s no surprise that even the largest eCommerce enterprise businesses have the need to partner with a payments provider that has the proper infrastructure in place.

Far beyond reducing foreign exchange fees

A few years ago, saving on foreign exchange fees was a big concern. Today, payment service providers integrate currency conversion costs directly into the payment flow and provide local payments by building a global banking infrastructure made up of connected domestic ACH networks. What sets one payment provider apart from the next is not the ability to save the marketplace and its payees costs on FX – it’s being able to provide local payments that are reliable, and coverage is key. The better the coverage and redundancy, the wider the marketplace can extend its reach and in turn, its volumes. Since 2005, Payoneer has been building and strengthening this network and today we’re proud to boast the most far-reaching and reliable end-to-end local payments network in the market.

Payoneer sends funds to over 200 countries and territories worldwide and services over 7,000 unique payment pathways between countries. This level of complexity requires a substantial banking infrastructure with multiple layers of redundancy to ensure that if one local settlement provider goes down or falls short, there’s always another one there as a backup. Because of this, we’re able to deliver a seamless payment experience to our clients worldwide.

Ensuring end-to-end local mass payouts on a global scale

When a transaction or a payout order is made, payment processors route the transaction information through their merchant account payment gateway to the acquiring bank, then to the issuing bank and finally back to the processor and the gateway. While this takes place, payment processors check for fraud, ensure fund requirements are met and perform a variety of risk and compliance procedures. If something goes wrong with one of the acquiring banks, payment will not go through.

Businesses sending mass payouts or awaiting large transactions will have their payouts and operations impacted if something goes wrong and there’s no backup settlement provider. The only way to make sure this does not affect payouts and overall operations is by having a payout partner that has a robust and global banking network.

So what can go wrong?

Businesses that make mass-payouts monthly to payees around the world need to make sure that their payments are transferred in full and on time each month to each recipient. If something goes wrong during any step of the way, payees experience delays, and the business reputation may suffer.

Things that can go wrong when making global payouts include:

• Political/Economic Turmoil – When a country experiences political or economic unrest, banking infrastructures may suffer as a result. Having multiple settlement providers per country mitigates this risk.
• Bank Bankruptcy – While this does not happen frequently, bank bankruptcy is certainly a risk factor.
• Bank Strikes – Some banks may strike while others continue to operate. Having a single banking partner could mean delayed payment if they are on strike.
• Natural Disaster – Fires, hurricanes, earthquakes, etc. can damage data centers and impact infrastructures impacting some banks but not others. Having redundancy ensures that payments can always go through, no matter what.
• High Volume Times – When there are too many transaction demands, this can cause a payment gateway to crash. Having redundancy here will help keep your payout process stable and make sure payments are issues on time.

Finding the right global payout provider

Years ago, we understood that the future of global commerce would be facilitated through local payments. As such, we’ve invested substantial resources over the past decade into building acquiring relationships in every corner of the world. We have long-standing banking partnerships with over 150 local clearing houses. In 145 countries we have 2 or more local banking partners and in 99 countries we have 3 or more local banking partners. We partner with global and regional banks, and work with regional digital payment providers to ensure full coverage.

The heart and soul of your global business relies on the ability to offer on-time, low-cost payments to any payee in the world. The world’s largest eCommerce businesses choose Payoneer’s technology and unmatched global banking infrastructure to send global payouts locally to every corner of the world. When it comes to choosing the right global payout provider, make sure you’re choosing a trusted solution that will deliver the best experience for you and your payees.