Managing payment security on global scale

The recent Mastercard report revealed that payment security is one of the biggest concerns SMBs have surrounding international payments that prevents them from expanding their operations to new locations. With the rise of digital payments and the demand for cross-border payments, many financial institutions have ramped up their offerings, but there are also new players entering the market. In addition to enabling SMBs to scale internationally with ease, this is great for spurring innovation, but there is a worrying lack of consideration for cross-border payment security risks and challenges they could pose to individuals, organisations, institutions, and payment systems as a whole. In this article we will explore the common security considerations for global payments and provide you with insights on how to safely manage your transfers globally.

Anti-money laundering (AML) regulations are among the primary concerns when it comes to managing payment security on a global scale. Each country has its own cross-border payment requirements, ranging from documentation to compliance. Before establishing financial operations in any new country, businesses must thoroughly understand these requirements and ensure compliance with AML laws.

A payment provider that simplifies compliance as an SMB expands into new regions and currencies can ensure that no illicit activity takes place, as well as unburden the financial team and increase efficiency. Such providers streamline documentation, facilitate compliance with AML regulations, and verify beneficiary details to mitigate the risk of payment fraud.

The verification of beneficiary details is another way SMBs can protect cross-border transactions. By using trusted payment providers, businesses can verify the legitimacy of recipients, reducing the likelihood of fraud. Most payment providers reject payments to unverified recipients, protecting your funds. Additionally, saving beneficiary information for recurring payments not only streamlines the process but also minimises the risk of errors in payment processing and the resulting delays. Finally, it’s critical to double-check that you can send the funds to the country your recipient is located in as due to geo-political reasons, some countries are limited by the majority of payment providers and institutions.

The details you will need from the beneficiary to process a cross-border transfer are:

Company name and address

Contact name and title

Phone number

Email address

Bank name and address

Bank account number

SWIFT/BIC code

Transparency of fees and transfers is another essential aspect of managing payment security globally. Multiple intermediaries are involved in cross-border payments, so fees can accumulate at each stage. When a transfer is expedited, it can be difficult to track its progress, know exactly when it will be completed or what stage the fees will be taken at. Choosing a provider that offers transparent fee breakdowns and allows tracking of transactions can allow businesses to make informed decisions and minimise unnecessary expenses. Another option could be using a provider, like Fyorin, that aims to eliminate intermediaries, by connecting you to a network of global financial institutions and letting you trade in the exact currencies you need to send money in.

Keep records of all cross-border payments you make at all times, and note all details - amount, beneficiary details, date, time as it will help in the event of any potential dispute. In the event of a fraud or loss, many neo-banks and fintechs cannot accurately track who is to be held accountable because they aren't able to protect customer funds effectively.

These are some of the points to consider when choosing and onboarding with a financial institution or a payments provider when it comes to global payments security.

Reliability - How often do payments fail due to issues with the beneficiary's account, rather than issues with the payment processor? A provider with a good reputation around cross-border payments is more likely to process payments smoothly and securely.

Licences - Search for providers that are licensed to operate in the counties you want to transact in or those that operate on top of a network of financial institutions with such licences, like Fyorin. This ensures the legality and smooth execution of transactions.

Encryption and data privacy - Your financial information should be encrypted and stored using protocols such as SSL or TSL to avoid hackers and fraudsters accessing it.

Fraud detection and prevention - Does the provider provide any mechanisms to protect your transactions against unauthorised access and fraudulent activity? You can ask this question about your provider's cards as well - do their cards have additional fraud prevention measures like dynamic CVVs, tokenization, and single-use cards?

If you’d like to start automating your international B2B payments in a secure and cost-effective way, get in touch with us and get access to our network of global financial institutions spanning over 200 countries and 220 currencies. Book a free demo or email us at [email protected]