What is a Cross-Border Payment? Borderless Payments

Cross-Border Payment is a system that is directly related to payments, money transfers, and financial transactions, especially the online transactions that are becoming a crucial infrastructure for modern businesses. Therefore, it is a matter that every business needs to understand in order to expand into international markets and meet customer needs to its fullest potential. This article will take you through every dimension of Cross-Border Payment, from its various aspects of importance to transferring money abroad via apps, which will certainly be beneficial for your business.

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Article Contents

• What is Cross-Border Payment? How is it Important for Businesses?
• In Which Countries Can Cross-Border Payment Be Used?
• What are the Steps to Using Cross-Border Payment?
• What Can Cross-Border Payment Be Used For?
• What are the Advantages and Limitations of Cross-Border Payment?
• Conclusion: What is Cross-Border Payment and Why Should Businesses Know About It?

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What is Cross-Border Payment? How is it Important for Businesses?

Cross-Border Payment is the process involving the transfer of money from an individual or organization in one country to an individual or organization in another. It is not limited to traditional bank transfers like the Swift system or Correspondent Banking, but also covers modern financial transactions and Fintech, such as payments via digital platforms and blockchain.

Generally, Cross-Border Payments must go through several important steps, including the foreign exchange (FX) process, compliance with regulatory and anti-money laundering (AML/KYC) requirements, as well as managing fees and the time it takes to transfer money, which varies by region and service provider. These factors can create challenges in terms of delays, lack of transparency in exchange rates and fees, and legal restrictions in each country. However, the trend of developing new financial innovations, such as blockchain solutions and the use of APIs to connect financial systems, is helping to make the cross-border payment process more efficient, faster, and more cost-effective, truly meeting the needs of businesses that require efficiency in their online payment systems.

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In Which Countries Can Cross-Border Payment Be Used?

Currently, Cross-Border Payment networks have expanded to cover many countries across Asia, allowing businesses to support international money transfers via apps. It can mainly be used in the following countries:

• Cambodia: ACLEDA BANK, CP BANK, BIC BANK, LOLC (CAMBODIA), PHILLIP BANK, ABA
• Hong Kong: BANK OF CHINA (HONG KONG), BANK OF COMMUNICATIONS (HONG KONG), BANK OF EAST ASIA, CITIBANK (HONG KONG), FUBON BANK (HONG KONG), HANG SENG BANK, HONGKONG AND SHANGHAI BANKING CORPORATION, OCTOPUS CARDS, TAP&GO, and HKT PAYMENT
• Indonesia: BANK CENTRAL ASIA, BANK SYARIAH INDONESIA, ESPAY DEBIT INDONESIA KOE, CIMB NIAGA, BANK SINARMAS, BANK MEGA, BANK PEMATA, and BANK PEMBANGUNAN DAERAH
• Malaysia: PUBLIC BANK
• Singapore: DBS and OCBC
• South Korea: GLN (HANA BANK, KB KOOKMIN BANK, TOSS BANK, and DAEGU BANK)
• Taiwan: GLN (TAISHIN BANK)
• Vietnam: TP BANK and SACOMBANK

To ensure that Cross-Border Payment operations are carried out effectively, businesses should study the details and comply with the regulations of the Bank of Thailand.

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What are the Steps to Using Cross-Border Payment?

Using the Cross-Border QR Payment system is an option that suits businesses in Thailand, especially for payments via QR Code, allowing tourists to spend conveniently in Thailand through their own applications. For businesses interested in implementing it, it can be done easily in 4 steps:

1. Publicize by clearly displaying the Thai QR Payment symbol at your store to inform tourists that your shop supports Cross-Border QR Payment.
2. The store displays the Thai QR Payment system's QR Code for the tourist to scan via their Mobile Banking app or their own application.
3. The tourist uses their Mobile Banking app to scan the QR Code and confirm the amount. The system will then display the amount in Thai Baht, along with the exchange rate and the amount in the foreign currency. Upon successful payment, an e-Slip will be received as proof.
4. The store will receive a notification when the payment is successful. If the store does not receive a notification, do not hand over the goods or services and advise the customer to check the status with their bank before proceeding.

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What Can Cross-Border Payment Be Used For?

Cross-Border Payment is a cross-border payment system that can be applied to a variety of business needs, including transferring money abroad via apps, investments, and much more, as follows:

International Trade

Cross-Border Payment facilitates convenient, fast, and transparent import-export operations of goods and services between different countries. This includes paying for goods from foreign suppliers and receiving payments from customers abroad, even if the transaction value is high or involves multiple currencies.

Money Transfers

It facilitates money transfers between individuals and businesses, whether it's sending money back home, paying for tuition abroad, or verifying wage payments for foreign workers through a secure and fast platform, without the need to carry large amounts of cash.

Investment

It opens up opportunities for investors to buy and sell assets in foreign countries, such as stocks, bonds, or real estate, and receive dividends or investment income back into their domestic accounts, reducing the steps and delays of traditional banking systems.

Tourism and Travel

It increases convenience for tourists when paying for various goods and services, such as airline tickets, hotels, or tour trips, without needing to exchange cash in advance. This reduces the risk of counterfeit banknotes and allows for real-time exchange rate checks.

Donations

It facilitates individuals and organizations in making immediate donations to foundations or charitable projects abroad, without going through complex currency exchange processes, and provides transparency in tracking donations.

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What are the Advantages and Limitations of Cross-Border Payment?

Cross-Border Payment is a cross-border money transfer process that facilitates both business and personal transactions, but it also has some limitations that businesses should consider.

Advantages

• Convenience: Payments can be made instantly without needing to exchange cash. Merchants receive the full amount, reducing the hassle of dealing with change.
• Security: It reduces the risk of accepting counterfeit banknotes and minimizes direct contact with cash.
• Reduced Fee Burden: For the end-user (tourist), there are often no transaction fees, which helps to encourage purchasing decisions.

Limitations

• Regulatory Requirements: The use of Cross-Border QR Payment must comply with AML/KYC regulations and specific rules of each country, which can be complicated and time-consuming to adhere to.
• Exchange Rate Risk: The value of the source and destination currencies may change during the transfer process, affecting the actual amount the recipient receives.
• Fees and Costs: Although buyers may not be charged fees for some payment channels, service providers may have currency exchange fees or processing charges that vary by channel and region, which merchants must consider.
• Security and Fraud Risks: International transactions can be targets for cyberattacks, data theft, or unauthorized impersonation to make transactions.
• Management Complexity: The Cross-Border Payment process can be more complex than domestic transfers as it requires resources, expertise, and a proper tracking system to ensure the transfer is successful.

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Conclusion: What is Cross-Border Payment and Why Should Businesses Know About It?

After learning together what Cross-Border Payment is and the benefits of transferring money abroad via apps or other means through this system, it should help many people apply this knowledge to increase sales opportunities and gain a competitive advantage. However, entrepreneurs should understand the various regulations regarding the Cross-Border QR Payment system in detail and correctly.

Currently, businesses in Thailand can easily accept payments from foreign tourists spending in the country by scanning a Thai QR Code. For instance, online payment services from KGP can accept payments through popular international apps like WeChat Pay, Alipay, Kakao Pay, and Touch ’n Go, among others.

KGP, Payment. Make It Smooth.

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LinkedIn : Kasikorn Global Payment

www.kasikornglobalpayment.com

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References

1. Cross-Border Payment. Bank of Thailand. https://www.bot.or.th/th/financial-innovation/digital-finance/digital-payment/cross-border-payment.html#accordion-60403f9376-item-47156e1136