November 28, 2022

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World Finance Reviews

Simplified Global Payouts Keep Finance Teams Happy

For enterprises, going cross-border means building out a network of suppliers and vendors, all in a bid to tap into new consumer bases. Nowadays, more often than not, those “supply chains” are made up of contractors and gig economy workers.

Omri Mor, co-founder and CEO of Routable, told PYMNTS’ Karen Webster that as is so often the case with end markets, these smaller vendors want to be paid in their preferred currencies (often the local currency) with speed — sometimes on demand.

“Larger and midmarket firms have increasingly needed to onboard and send money internationally to traditional vendors and contractors,” Mor said.

If businesses see more than 25% of their accounts payable (AP) tied to international payments, they’re in need of a cross-border payments solution — and a (digital) paper trail that keeps track of it all.

But as Mor explained it, the majority of traditional cross-border payment solutions come up short when it comes time to facilitate payments on a grand scale, where mass payouts need to be done with flexibility. The traditional conduits are built to support single peer-to-peer (P2P) transactions, but not one-to-many payments.

“Sending 1,000 business payments internationally is a lot harder than doing it domestically,” said Mor. Different countries have different tax jurisdictions, risk and fraud regulations and compliance hurdles.

See also: Why 40% of Businesses Are Making AP Innovation a Priority

And one overarching question should govern it all, dictating how new technologies address those frictions: What would keep the accounting and finance teams happy?

Beyond international vendor onboarding, some of the challenges that have needed to be addressed include making sure that the right person, at the right time, knows what instructions they need to make sure a transfer goes through — and making sure all the data gets sent through to enterprise resource planning (ERP) software.

To that end, Routable said in a Tuesday (July 26) release that it has debuted its Cross-Border Payments solution. The company said in its release that the solution allows client firms to pay their vendors and contractors across more than 220 countries.

In terms of the mechanics, the companies have one point of interaction for domestic and global payouts. This eliminates the need for multiple payment systems and having to navigate complicated workflows. Payment options include International ACH and SWIFT, and payments can be processed at various speeds and in numerous currencies while maintaining full visibility into each payment.

This allows the finance, operations and engineering teams to handle payouts from their dashboards, using a no-code CSV upload feature and build-out payouts through the use of a REST application programming interface (API).

Improving the Payout 

The end result, he said, is that an enterprise can scale from hundreds or thousands of payments a month to tens of thousands of payments a month. The Holy Grail has been to craft an intuitive interface that improves the payout for both the sender and the recipient.

“Multicurrency conversions need all of these things,” he said. The tasks are daunting enough that many finance and accounting teams shy away from the intricacies of making and recording international payments.

Creating a single platform through which these firms can pay vendors at home and internationally offers a competitive advantage to the smaller small- to medium-sized businesses (SMBs) that have wanted to grow into global players.

The platform model, he said, addresses the fragmentation that exists in the market, where processors have been able to move money but have been unable to update into ERPs.

Related: With Payments, AI Glues the Connected Economy Together

Through offerings such as Routable’s, there’s an easier way to do a bulk CVS upload for a complete range of payments, rather than worrying about local transfers or SWIFT and what the conversion rates might be. Purpose codes (which allow funds to be released) are already available via the firm’s software.

“We’ve wanted to make sure that the firms with a high reliance for ERPs for their accounting … could scale, especially as AP volumes grow” and ad hoc and real-time payments gain traction, Mor said.

Looking ahead, Routable will be examining how to provide finance teams with a lens into risk management (without having to build a separate tool) and build that offering into the onboarding process.

“At the end of the day, it’s really about what can reduce friction the most,” he told Webster, adding that “if there’s going to be a new payment method or a new rail that can help us deliver funds faster, we’re interested. If it can increase transparency, we’re interested — and if it can reduce cost per transfer, we’re interested.”



About: The findings in PYMNTS’ new study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” a collaboration with PayPal, analyzed the responses from 9,904 consumers in Australia, Germany, the U.K. and the U.S. and showed strong demand for a single multifunctional super apps rather than using dozens of individuals ones.