Cheaper, Faster, Better
Posted Under: News
Late 2020, the Financial Stability Board (“FSB”) and the Committee on Payments & Market Infrastructures (“CPMI”) published their roadmap to enhance cross-border payments, and then late in 2021 announced clear global targets for the speed, cost, access, and transparency of cross-border payments coming into effect 2027.
This document was presented to key central banks around the world, and their governments, and the race is now on to improve the transmission of data, create proposals for how the payment eco-system should be improved, as well as beefing up service level agreements, rules and regulations.
This is no small feat, in some respects. But banks could support and adopt some changes much, much sooner.
How? How about charging a fee for global payments that doesn’t result in you having to sell your kidneys to pay for it? Maybe, and here’s a weird and novel idea, don’t charge a fee at all!
Shock, horror. Free cross-border payments!
Not going to happen, sadly. And the reason is while banks have a multitude of divisions, departments, and a vast array of products, there’s also a product manager responsible for generating income for their specific silo. Instead of looking holistically across the relationship revenue and applying common sense to the fee schedule you’ll probably notice your monthly account analysis statement strewn with scores of line items that, in some cases, requires a Harvard degree just to understand.
But, to defend banks (and, for the sake of clarity we are not bank bashers) they are working with dusty old legacy systems that are costly to maintain and thus there’s a significant amount of revenue that is used to ‘run-the-bank’ versus the budget set aside to ‘change-the-bank’.
Plus, banks are not not-for-profit organizations!
Banks are aware they have limited time to get this right because FinTech (Financial Technology) companies (like GreenShootsFX) are cropping up across the entire planet offering payment services that largely satisfy the FSB’s mandate.
Santander Bank, in Europe, publicly stated they needed to significantly reduce the FX mark-up on their foreign currency transactions because it would be better to lose half of their income now than all of it in the future as clients become wise to more cost-effective alternatives.
One of the reasons we don’t bash banks is we, at GreenShootsFX, still require banks (at this stage) to move funds globally but with our decades of experience in the global payment space, working at more than 12 global banks, we know which banks to use in order to offer the service our clients deserve.
And it’s not just about getting the best transaction price for GreenShootsFX, it’s about selecting partner banks who have an extensive network of counterparts we can tap into which helps expedite the delivery to the beneficiary as well as significantly reducing lifting fees (in many cases to zero). We have a blog on this very topic here.
Banks are no longer the one-stop shop where you might have your mortgage, investments, car loans, insurance policies. It’s likely that you might buy such services from non-bank providers who are experts in their field.
So why not give some thought to buying your global payments and currency conversions from an expert rather than a generalist, where you can significantly improve your bottom line and maybe learn a thing or two about risk management (if you pay global vendors in USD then you likely can’t see the risks you have).
Take 15 minutes out of your year to learn more by contacting GreenShootsFX.