How can NGOs and charities mitigate risk with cross-border payments?
There have been dramatic shifts in payments in recent years, supercharged by the West and developed countries, which in turn has influenced the acceleration of Africa’s businesses becoming more digitised. Non-profit organisations and charities operating in emerging markets need to be aware of various improvements, challenges, and market movements to provide them with the necessary tools to conduct their work safely and effectively.
According to a report by McKinsey, Africa’s e-payments market is expected to grow 152% from 2020 to 2025. It becomes increasingly imperative that companies equip themselves with sophisticated technology that’s engineered for safe international payments in exotic currencies.
What’s changed for non-profits
Traditional banks have been challenged in recent years, as their offering of high operating costs and flawed or complex infrastructures leading to long delays are no longer the only viable option. Businesses are now being offered more sophisticated options for the digitisation of payments through intelligent technology. This offers an automated, centralised, and smarter treasury function that gives businesses, both big and small, the necessary tools to operate in both developed and emerging markets safely and smoothly.
Taking at glance at the markets, the surge in the US dollar has had its negative ripple effect on countries relying on food imports as interest rates rise and foreign reserves dwindle. NGOs and charities operating in African countries are in dire need of a solution which helps overcome challenges surrounding currency risk, while avoiding high transaction fees.
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How to mitigate risk when making cross border payments
The dependence of donors and individual contributions to provide services and support while often receiving insufficient governmental support further drives the need for a sophisticated payments provider. There are several ways in which NGOs and charities can protect themselves and overcome cross-border payment challenges amidst economic factors like a currency crunch and inflation.
Fraud protection with a secure platform
While not exclusively a concern for NGOs, feeling vulnerable to fraud heightens the necessity for increased protection when dealing with international payments. Whether it’s paying food suppliers or receiving funds from donors, a safe platform designed for cross-border payments is essential.
Introduce a platform that’s tailored for your organisation that values data protection, minimal touch points as well as conducting thorough compliance, FCA regulations and AML/CTF checks. Thus giving greater protection against NGOs and charities to conduct their services.
Avoid hidden costs and fees
Several challenges have been identified with cross border payments that banks often fail to overcome. Firstly, the speed of payments traditionally was much slower, and completion could take days. Secondly, the complex processing brought with it high fees and transaction costs as banks were unable to provide funding.
As time moves forward, these challenges can move to a thing of the past as legacy platforms and traditional banks are cast aside in favour of integrated solutions that deliver instant currency exchange. Verto offers an integrated platform which supports over 50 global currencies to process domestic and cross-border payments intuitively, with no high payment fees or long delays. Explore more of what Verto has to offer.
Support for international operations
Integration of global currencies as well as facilitating quick and safe payments delivered by electronic wallets which have exhibited strong growth. These wallets offer support for NGOs operating from emerging markets for better control, visibility and tracking of their payments. Moving away from cash payments and various banking cards towards e-wallets could provide the stability needed for any international transfers. Find out how to use Verto’s multi-currency wallet for international payments.
Auditing and consistent reporting
To keep running effectively, organisations need to ensure they keep records of funds and account for all incomings and outgoings. Cash payments or using multiple accounts can make pulling together a proper paper trail a hassle. For proper treasury management, as well as sensitive information being protected, holding your finances in one digital platform means consistent reports and all funds accounted for. It also relieves the headache of managing multiple banking relationships and tracking down currency exchange providers. Overall, delivering a smooth and streamlined payments process that gives peace of mind and greater security.