How corporate cards can transform cross-border B2B payments

Cross border B2B payments, a process often fraught with inefficiencies that can impact a company's bottom line, have long been a thorny issue for finance directors. High transaction fees because of multiple intermediaries can eat into profits, especially for businesses engaged in frequent international transactions. Banks' unfavourable exchange rates compound this issue, mainly when dealing with volatile currencies or emerging markets.

The snail's pace of traditional international transfers can wreak additional havoc on cash flow management and payment deadlines. Lack of transparency in these transactions often leads to unexpected fees and complicates financial planning. And that’s all before navigating the regulatory maze surrounding B2B international payments.

These challenges underscore the need for innovative solutions in the cross border B2B payments domain. Enter multi-currency corporate cards — here’s the benefits and how they’re revolutionising the world of international finance. 

1. Reduced fees 

Multi-currency corporate cards are slashing the costs associated with B2B international payments. Unlike traditional bank transfers, which often involve a raft of hidden charges, these cards offer transparent pricing structures. Some providers even boast zero foreign transaction fees — a significant boon for businesses with high international transaction volumes.

This cost reduction doesn't just pad the bottom line; it frees up capital for strategic investments, potentially giving businesses a competitive edge in the global marketplace.

2. Better exchange rates

Multi-currency corporate cards typically offer more competitive, near-market exchange rates than traditional banks. This can result in substantial savings on currency conversions, especially for large transactions. Some cards allow users to lock in exchange rates, protecting against currency fluctuations — a crucial feature for businesses operating in volatile markets.

For instance, a British manufacturer sourcing raw materials from multiple countries could use a multi-currency debit card to take advantage of favourable exchange rates, potentially saving thousands on each transaction.

3. Faster transactions

The speed of cross border B2B payments is crucial in today's fast-paced business environment. Corporate cards enable instant transactions, significantly improving cash flow management. This speed is particularly beneficial when dealing with time-sensitive purchases or when rapid payment is required to secure a deal.

Imagine you’re a London-based startup needing to pay a US supplier quickly to secure limited stock. You could pay immediately with a multi-currency corporate card, potentially beating competitors to the punch. Faster transactions also reduce the risk of exchange rate fluctuations affecting the final payment amount — a key consideration for businesses operating in volatile currency markets or dealing with large transaction volumes.

4. Increased transparency 

Corporate card platforms typically offer real-time tracking of transactions, providing businesses with up-to-date information on their spending. This visibility allows for better controlling and monitoring of expenses across different currencies and markets. Detailed transaction reports offer comprehensive insights into spending patterns and trends, which are invaluable for financial planning and identifying areas for cost optimisation.

5. Simplified compliance 

Corporate card providers often handle the compliance work associated with B2B international payments. This service can significantly reduce the administrative burden on businesses, allowing them to focus on core operations. Many solutions include built-in compliance checks, helping companies to adhere to international regulations and avoid potential legal issues.

Consider a UK fintech expanding into new markets. With a multi-currency corporate card, they could easily navigate the complex landscape of global financial regulations. Regular updates to compliance features ensure that businesses stay current with changing international legislation, a crucial aspect of managing cross border B2B payments in an ever-evolving regulatory environment.

6. Wider acceptance 

Corporate cards are widely accepted globally, offering flexible currency options. This broad acceptance can simplify transactions with international suppliers and partners, reducing the need for multiple payment methods. 

Put simply, the ability to use corporate cards for various transactions, from online purchases to in-person payments, provides unprecedented flexibility and simplicity in managing international expenses.

7. Easier reconciliation 

Integrated systems and detailed reporting make tracking and reconciling payments across different currencies easier. This streamlined process can save significant time and resources in financial management. Many corporate card solutions offer automated expense categorisation, simplifying allocating costs to different departments or projects.

8. Multiple currency balances 

Users can hold balances in various exotic currencies, reducing the need for frequent conversions. This feature can help businesses manage their exposure to currency fluctuations more effectively. 

Holding multiple currency balances allows for strategic timing of currency conversions, enabling enterprises to take advantage of favourable exchange rates when they occur.

9. Expense management

Many corporate cards come with tools for better tracking and managing international expenses. These tools can help businesses enforce spending policies and identify areas for cost reduction. Advanced features often include setting spending limits and approving transactions in real-time, helping prevent overspending and unauthorised purchases.

This level of control and insight can be invaluable for businesses looking to optimise their international expenses.

10. Virtual cards 

Some providers offer virtual cards for enhanced security in online transactions. These cards can be generated instantly and used for specific purchases, reducing fraud risk. Virtual cards often come with customisable spending limits and expiration dates, providing an additional layer of control over expenses.

A company could generate virtual cards for each of their B2B international payments, setting specific limits and expiration dates for each transaction. This simplifies allocating expenses to specific projects or departments, making it easier to track ROI on international investments while enhancing security.