Digital wallet (e-wallet) architectures offer great potential and tremendous flexibility to foster payments innovation that improve business workflows. This is true both for businesses competing globally for customers as well as for businesses managing global supply chains or distribution channels.
Think Globally | Act Digitally
If you’re going to market globally, and in today’s B2B marketplace who isn’t, how easy is it for your customers or your partners to buy or sell? And how cost-effective?
Empowering customers to buy your product or service however they want to do so is at the core of any multi-channel marketing strategy. Ease of doing business has become a competitive advantage for distribution channels across in nearly every industry.
Consumer-based e-commerce platforms leverage the ubiquity of credit and debit cards to simplify the majority of transactions but at what cost? Converting currency for international purchases is automated based on the POS and the merchant account’s banking partner. Easy enough? Perhaps. But competitively executed? Likely, not so much. No wonder the majority of B2B spending is not done via credit or debit cards despite their convenience.
So, how can B2B business mimic the convenience of the ubiquitous payment networks whilst avoiding the burdensome costs? Digital wallets are a start. And an intelligent global payments platform leveraging their flexibility can provide many of the answers.
A key organizing principle for architecting an intelligent payments platform is the ability to serve anyone, anywhere. On the receivables side, that translates to the ability to accept payments from multiple sources via multiple means from any country, securely and compliantly, e.g., AnySource. Likewise, on the payables side, it means the ability to make payments to anyone, anywhere in their currency or choice of payment method securely and compliantly, e.g., AnyPay.
Thus, in an intelligent payments platform, architecturally, all accounts are created with the ability to contain multiple, currency-specific digital wallets and track payments uniquely by program or purpose. An account set-up for anyone, anywhere, minimally, has a one wallet in their local currency while also having the ability for a wallet in whatever currency is needed to complete a transaction.
Currency exchange, then, occurs on the platform via an intra-account wallet-to-wallet (W2W) transfer -- at lower costs than traditional banks. Such a benefit can be enormous at scale. And, moreover, the exchange cost can be placed on either side of the transaction, the Buyer or the Seller.
Suppliers | Aggregated Accounts
This digital wallet architecture extends both to your distribution channel (Partners) as well as your supply chain (Suppliers).
Supplier payments are an innovation hot spot, particularly those in your global supply chain requiring cross-border payments. Unless you’re in the currency arbitrage business, currency exchange is an expense to be managed and currency valuation a matter for your quarterly reporting more so than managing supplier transactions.
Supplier accounts, of course, can also have multiple digital wallets: one in their local currency; one in your payment currency. This makes it easier to automate both the payment process and the currency exchange process along with a complete audit trail.
Aggregated account architectures further payments innovations. Payment APIs can integrate multiple payment sources, providing customers, partners and suppliers with means for tracking their payments. The potential for business model innovation goes well beyond traditional models by dynamically creating Customer accounts or digital wallets. Imagine a model where the customer monies flow to you directly while partners and suppliers are paid instantly (or nearly instantly).
Finally, using digital wallets can simplify regulatory compliance and tax reporting when required. Accounts can be dynamically created with any transaction, while vetting Customers to complete KYC and AML regulatory requirements can be completed with a-synchronous automated process. Data required for tax reporting can also be accessed by the account-holder as needed.
For more on how to architect intelligent payments download our e-book, Architecting Value Using an Intelligent Payments Platform, or drop us a line.
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