07 May 2017
High costs and slow transactions are major obstacles for UAE companies when it comes to cross-border payment transfers with 7 out of 10 firms saying they feel lack of transparency in traditional payment transfers, reveals a new survey.
Out of the 122 UAE companies surveyed by cross-border payments network PayCommerce, 32 percent said traditional payment transfers were very slow and 44 percent said they were very expensive. Another 10 percent said they were unable to get payment status and some regarded it difficult to find correspondent banks in certain regions.
Globally, the value and volume of cross-border transactions are growing steadily at 8 percent and 10 percent respectively, said Boston Consulting Group (BCG) Global Payments. The value of cross-border transactions is expected to nearly triple to over $54.8 trillion by 2022, from $20.5 trillion in 2012 and the number of transactions is expected to grow from 9.9 billion to 20.7 billion. However, certain factors such as high transaction fees, time lag and lack of transparency remain as challenges for businesses.
In March, Germanys Deutsche Bank joined other big banks that stopped clearing cheques denominated in Euros for some banks in the Middle East, Reuters reported, quoting sources familiar with the matter. Clearing is the process of settling transactions between banks and is a big business for large global lenders.
The bank told lenders in the Middle East with no Deutsche Bank accounts that it would no longer clear their cheques in Euros starting last April, a service it had previously offered. (Read here)
However, Britains Barclays said it plans to increase its share of the Euro clearing business in the Middle East and North Africa region (MENA) from low double-digits to 25 percent in the next three years, capitalising on growing demand from companies for transactions in Euros.
"It is about gaining market share in the euro clearing right now," KP Sunil Rao, director of the financial institutions group in MENA, was quoted as saying by Reuters. (Read here)
Max Narro, Chief Executive Officer of PayCommerce, said: Weaknesses of traditional international transfers are already leading to a shifting of customer preferences as they become educated about the various models in the marketplace.
"The widening gap between customer expectations and effectiveness of traditional international payment systems are leading customers to look for innovative payment solutions such as PayCommerce's first ever instant cross-border payment. This will enable payees to receive remittances in real-time, eliminating costly clearing processes and reducing risk in settlement procedures. We are not very far from the time when majority of businesses would prefer real-time, digitally enabled cross-border payments," Narro said.
High costs and slow transactions are major obstacles for UAE companies when it comes to cross-border payment transfers with 7 out of 10 firms saying they feel lack of transparency in traditional payment transfers, reveals a new survey.
Out of the 122 UAE companies surveyed by cross-border payments network PayCommerce, 32 percent said traditional payment transfers were very slow and 44 percent said they were very expensive. Another 10 percent said they were unable to get payment status and some regarded it difficult to find correspondent banks in certain regions.
Globally, the value and volume of cross-border transactions are growing steadily at 8 percent and 10 percent respectively, said Boston Consulting Group (BCG) Global Payments. The value of cross-border transactions is expected to nearly triple to over $54.8 trillion by 2022, from $20.5 trillion in 2012 and the number of transactions is expected to grow from 9.9 billion to 20.7 billion. However, certain factors such as high transaction fees, time lag and lack of transparency remain as challenges for businesses.
In March, Germanys Deutsche Bank joined other big banks that stopped clearing cheques denominated in Euros for some banks in the Middle East, Reuters reported, quoting sources familiar with the matter. Clearing is the process of settling transactions between banks and is a big business for large global lenders.
The bank told lenders in the Middle East with no Deutsche Bank accounts that it would no longer clear their cheques in Euros starting last April, a service it had previously offered. (Read here)
However, Britains Barclays said it plans to increase its share of the Euro clearing business in the Middle East and North Africa region (MENA) from low double-digits to 25 percent in the next three years, capitalising on growing demand from companies for transactions in Euros.
"It is about gaining market share in the euro clearing right now," KP Sunil Rao, director of the financial institutions group in MENA, was quoted as saying by Reuters. (Read here)
Max Narro, Chief Executive Officer of PayCommerce, said: Weaknesses of traditional international transfers are already leading to a shifting of customer preferences as they become educated about the various models in the marketplace.
"The widening gap between customer expectations and effectiveness of traditional international payment systems are leading customers to look for innovative payment solutions such as PayCommerce's first ever instant cross-border payment. This will enable payees to receive remittances in real-time, eliminating costly clearing processes and reducing risk in settlement procedures. We are not very far from the time when majority of businesses would prefer real-time, digitally enabled cross-border payments," Narro said.
