Amid economic uncertainties, Kenyan businesses are venturing beyond the borders, looking for avenues of growth and prosperity.
Businesses, particularly banks, are leading this charge, organising trade delegations to emerging markets like the Democratic Republic of the Congo. However, despite the promise of global expansion, one significant challenge persists — cross-border payments.
For enterprises expanding internationally, obtaining access to foreign currency, notably the US dollar, poses a major hurdle. Even after overcoming this obstacle and delivering goods and services globally, securing timely and cost-effective payments remains a formidable challenge.
The intricate and costly nature of cross-border payments often hinder the potential for profitable international trade.
Businesses also face high payment costs when receiving funds from overseas clients. The multiple intermediaries contribute to complexity and delays to the receipt of funds.
The regulatory landscape, covering Anti-Money Laundering (AML), Know-Your-Customer (KYC), data protection, and anti-fraud measures, further complicates matters.
Compliance processes demand substantial investments in systems and manual interventions, inevitably inflating the expenses associated with cross-border payments.
Lengthy compliance procedures also contribute to delays in payment processing.
Thankfully, technological innovations are emerging as solutions to these challenges. Advances in Application Programming Interface and payment gateways are streamlining and automating payments and compliance processes. This significantly reduces the turnaround time for cross-border payments.
These innovations extend beyond speed; they expand the range of available currencies, providing businesses with opportunities to tap into previously unexplored markets.
It is time for businesses and individuals to invest in technologies that facilitate seamless cross-border payments.
The writer is the Verto Kenya Country Director. Email: kevinvertofx.com