The complexities of processing payments globally without a partner

Managing global payments is complex if you’re a marketplace – or any other software platform. From navigating diverse regulations to building and maintaining the infrastructure for cross-border transactions, the challenges can quickly overwhelm even the most resourceful businesses.

Whether you're managing payments for your business or embedding financial services for your customers, the complexities can feel insurmountable.

The good news? With the right partner, you can simplify these complexities and unlock new growth opportunities by embedding payments (and‌ other financial offerings) into your platform. By delivering a seamless payment experience, you can scale globally while driving value for your business and enhancing customer satisfaction. 

Here’s what you need to know about the hurdles of global payments – and how to overcome them.

Why are global payments so complex? 

Managing payments on a global scale isn't just about accepting transactions; it involves a web of regulatory, technical, and operational challenges that vary from country to country.

These challenges affect businesses handling payments for their own operations and platforms embedding financial solutions for their customers.

First, there are cross-border compliance requirements.

Each country has its own financial regulations, including know-your-customer (KYC) checks, anti-money laundering (AML) laws, and other data privacy requirements. Staying compliant across multiple regions is resource-intensive and requires constant monitoring of regulatory changes.

Some regions also require specific licenses to process payments or hold funds. For example, in the US, businesses handling money transmission must obtain money transmitter licenses (MTLs) in each state where they operate. This process is lengthy, as each state has unique requirements, fees, and ongoing compliance obligations. Acquiring these licenses involves financial audits, bonding requirements, and regular reporting to state regulators. 

To add another layer of complexity, international transactions often carry increased risks, such as higher chargeback rates and exposure to fraud. Factors like varying consumer protection laws, differing regional payment behaviors, and cross-border complexities exacerbate these risks. To mitigate them, businesses must deploy robust fraud prevention measures – such as tokenization or machine learning models – and establish effective chargeback management strategies to safeguard revenue and customer trust.

Next, there are technical infrastructure demands.

Supporting global payments requires building and maintaining sophisticated technical infrastructure:

• Managing multiple currencies: Businesses must handle currency fluctuations and establish efficient settlement mechanisms with local banks.

• Local acquiring: Relationships with local acquirers and payment networks are essential to process card payments in different regions. 

• Scalability: Building secure, reliable payment systems at scale requires ongoing investment and specialized expertise.

Technical demands increase costs and require continuous optimization to meet evolving market needs.

Finally, there are operational challenges.

Beyond compliance and technical infrastructure, operational demands further complicate global payments. 

Consider multilingual customer support: You’ll need to provide adequate customer support in different languages and time zones, which is highly resource-intensive. And you’ll be responsible for managing global accounting and reporting international transactions for tax purposes, which can be complex and error-prone.

With financial regulations constantly changing, you'll need to dedicate resources to monitoring and adapting to regulatory updates in various countries.

It all adds up to an enormous tangle of complexity and responsibility – which is precisely why many companies opt to partner with payment facilitators (payfacs).

What is a payfac? 

A payfac, short for payment facilitator, acts as an intermediary between your business and the payment network, simplifying the process of accepting payments without requiring a merchant account in each country. 

How do payfacs simplify your operations?

With a payfac powering your global payments, you’ll enjoy faster and easier merchant onboarding. Specifically, payfacs handle the complex underwriting and KYC checks, significantly speeding up the process compared to traditional merchant accounts. Payfacs also reduce risk and complexity, taking on the legal and financial responsibility for processing payments and minimizing the risk of chargebacks and compliance issues for businesses.

Many payfacs grant access to advanced features like fraud prevention, tokenization, and subscription management, which enhance security, streamline payment processes, and improve customer retention. They often provide APIs and tools to customize the payment experience for your merchants and customers.

In addition, a payfac simplifies financial management with streamlined fee structures and consolidated reporting.

What financial benefits do payfacs offer? 

Payfacs simplify global payment operations and provide financial advantages that can drive platform growth.

For example, Gimme Swag, a company specializing in branded collectibles, faced challenges expanding internationally. They needed a platform to accept payments in multiple currencies and pay out to international vendors. By partnering with Airwallex, Gimme Swag reduced transaction costs with favorable FX rates, eliminated hidden fees, and streamlined payment processes, leading to increased profitability as they scaled globally.

Cost savings through optimized transaction fees and FX rates are among the most immediate financial benefits payfacs offer. These efficiencies often translate into higher customer satisfaction and increased conversion rates, which are essential for successfully scaling.

Payfacs also help businesses unlock new revenue streams by enabling platforms to charge transaction fees or bundle payments with premium features. Offering streamlined payment solutions enhances your platform’s appeal to prospective merchants and fosters loyalty among existing ones. With the ability to support a broader range of businesses, including those in high-risk industries, payfacs help platforms expand their reach while maintaining operational efficiency.

Airwallex is a globally trusted payfac.

Managing global payments doesn’t have to be a daunting challenge. Whether you’re navigating the complexities of accepting payments for your business or embedding financial services into your platform, Airwallex provides the flexibility and tools to meet your needs.

Our software and APIs enable businesses to streamline operations and scale globally. Airwallex simplifies the entire payment process, from authorization to settlement, helping you easily manage cross-border transactions.

For businesses integrating payments directly (first-party use case):

• Accept payments in multiple currencies and local methods using Checkout and Payment Links.

• Manage global accounts and issue cards for seamless expense and financial management.

For platforms embedding financial services for their customers (third-party use case):

• Build and monetize financial solutions with Global Treasury, Banking as a Service, and Payments for Platforms.

• Offer innovative services like multi-currency accounts, card issuing, and global payments while maintaining compliance and scalability.

With Airwallex, you can eliminate the operational and regulatory hurdles of global payments, unlock new revenue streams, and provide a superior experience for your business or your customers.

Ready to simplify global payments and scale your business? Learn more about Airwallex and how we can help you grow.