Cross-border payments: learn why fintechs play a crucial role

More and more products and services can be easily processed across borders, giving consumers a new world of choice. However, cross-border payments have faced, and in some cases are still facing significant challenges. This is because the traditional banking infrastructure has been unable to process trillions of dollars in international remittances efficiently and cost-effectively. In response, many fintechs have emerged with innovative solutions that play a critical role in the payment chain.    

Challenges of Cross-Border Payments    

The traditional banking infrastructure is being challenged by outdated technologies that cannot cope with the explosion in global transaction volumes. While traditional methods such as bank transfers and credit cards meet part of the need, more modern solutions such as digital wallets or, in the case of Brazil, the innovative Pix, are also gaining ground. However, the major players often find it difficult to match the agility of fintechs in adapting to market needs. For example, four factors continue to present significant challenges to the traditional interbank system:    

1. Outdated technologies    

     The technology that supports cross-border payments often has to operate on outdated platforms. This leads to limitations and delays in a settlement.    

2. Complex compliance checks    

To prevent fraud and money laundering, banks often have to rely on multiple sources to perform proper checks. In an older and slower system, this can lead to delays and even incorrect indications.    

3. Different data formats    

It is difficult for banks to automate because of different standards, which causes delays and increases costs.    

4. High financing costs    

Banks must hold aside enough capital, sometimes in several currencies, to cover each transaction in order to facilitate speedy settlements. Moreover, over-financing and rising expenses may result from uncertainty regarding the timing of the funds' entry to offset this coverage.    


Fintechs innovate to fill sector gaps    

In the context of cross-border payments, fintechs like Bazk play an important role. Through innovative technologies and agility to keep up with industry changes, they offer solutions that significantly improve the efficiency and security of transactions made between payers and recipients from different countries.    

Therefore, even in a complex scenario, global merchants can pave new ways for their businesses using payment gateways. In other words, fintechs act as intermediaries, solving critical challenges in the traditional system through innovative technology. To ensure compliance with the laws of the countries involved, it is essential to select a qualified partner who understands the process well.    

In this sense, Brazil is a great example of a growing market with a relatively complex regulatory system. But, with Bazk, companies worldwide can have an agile, transparent, and secure cross-border payment solution. In addition, this Brazilian fintech has experience with the cultural, market, and regulatory aspects of the country since it was founded. Furthermore, Bazk's solution integrates the payment methods preferred by Brazilians - including Pix - into cross-border transactions.    


1. One integration, many advantages    

Bazk gives merchants the flexibility to connect to numerous financial institutions with just one API integration. It also provides real-time information for the business and the client, risk management, and fast pay-in and payout. All of this is combined with modern technology and processes to lighten the workload of your development and integration team.    

2. Artificial intelligence and compliance-first approach    

To ensure compliance with the regulatory system and the highest Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) standards, Bazk takes a compliance-first approach. With constant monitoring, the Brazilian fintech values continuous improvement and mastery in its processes, acting preventively to protect everyone involved. To this end, it performs risk-based analysis for financial partners, merchants, and users with full transparency in processes and compliance with regulatory requirements, even employing Artificial Intelligence resources.


3. Integration with Pix    

Brazilians' local payment methods have been completely transformed by The Pix, offering instant and secure transfers. Therefore, incorporating it into cross-border transactions is a logical step to boost business. To do this, just integrate Bazk's solution into your website. Providing a hassle-free implementation with in-house development, fintechs like Bazk are redefining cross-border payments – making them more agile, secure, and transparent for everyone. So, why get in touch with us right now and find out everything we can do for you?