Paying suppliers overseas isn’t always smooth sailing, especially if you’re tied to the traditional, manual processes that tend to make international payments even more of a headache than the standard domestic transaction. Thanks to innovative payment technologies, A/P departments have options beyond traditional cross-border bank transfers—payment methods that provide operational efficiencies, cost-savings, and peace of mind for customers and suppliers alike. Virtual card numbers (VCNs) are a universal payment solution serving companies around the world. They enable you to…
Sidestep the Correspondent Bank Model
The cross-border payments environment is nothing if not complex. Most every company has its own way of “doing business” along with its own set of regulation and compliance standards. Navigating the various local financial systems can be a headache, international “wires” can be slow, and transacting can get expensive. Using VCNs eliminates the need to involve the traditional banking players, as no banking information is exchanged and/or maintained between the buyer and supplier.
Maintain Control and Security
Every payments professional, regardless of their home country, shoots for control and security in their operations—yet their targets can be tougher to hit when transacting with global partners. Transparency can pose a challenge, along with data integrity, as information traveling through disparate systems can become truncated, lost, or even stolen. And, there are also potentially more hands involved in each transaction. But the implementation of digital tools and more automated processes is lessening the burdens, making payments faster, easier, and safer from invoicing through reconciling.
Virtual payments enable administrators to set precise controls for each transaction—these include spend amounts, payment dates, and merchant categories. VCNs are also valid for a single purchase and become invalid after use. Plus, since they don’t live on a physical card, VCNs are almost impossible to lose or have stolen.
From processing costs associated with labor, materials, and bank fees to FX mark-ups and cross-currency transaction fees, the financial impact of international payments can really add up. FX rate mark-ups and cross-currency transaction fees can average 3% per payment and wire transactions can range from $10-$25 per payment. Companies paying suppliers in foreign currencies and using their suppliers’ local financial system tend to assume unnecessary costs, considering the availability of VCNs. Virtual credit cards eliminate most of these costs—administrative and otherwise—and help organizations manage their cash flow more effectively.
Transact in Suppliers’ Currencies
VCNs can be issued in and settled in multiple currencies—without FX or conversion fees. With payments and settlements in their home currency, suppliers enjoy levels of ease convenience they probably aren’t getting from other customers who continue to leverage the “old” ways of working. In fact, VCNs open companies up to new clients or suppliers who may not easily accept payment in foreign currencies. And what’s more, with a simpler, streamlined approach, both sides of the transaction grapple with fewer errors and a quicker reconciliation process.
Use a Globally Accepted Payments Network
The data exchanged for a VCN payment contains the same info as plastic cards: a 16-digit card number, an expiration date, and a CVV number. That means VCNs are accepted anywhere major credit cards are accepted—and use the same secure, widely known and trusted networks.
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