Insights Podcast
Challenges and Innovations in Cross-Border Payments
Sep 9, 2024
Hugo Remi, CEO of Cardaq, and George Iddenden from the Payments Association dive into the intricacies of cross-border payments. They discuss the challenges businesses face with currency exchange volatility and regulatory compliance, especially for smaller firms. Insights on the role of blockchain in enhancing transparency and security are shared, along with the potential of stablecoins. The conversation also highlights the need for real-time payment systems and innovations in financial technology to navigate this evolving landscape.
28:43
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Quick takeaways
- Navigating currency exchange risks is essential for businesses, as volatility can significantly impact transaction costs and profitability.
- Regulatory compliance presents formidable challenges for firms in cross-border payments, particularly smaller entities that lack resources to manage stringent regulations.
Deep dives
Managing Currency Exchange Risks
Navigating currency exchange risks is critical for businesses involved in cross-border payments, as exchange rate volatility can drastically affect transaction costs and profitability. Advanced financial instruments like hedging and forwards are prevalent, but they often remain largely inaccessible to small and medium-sized enterprises due to the need for relationships with major banks and costly resources. Consequently, smaller firms tend to rely on financial institutions to cover these risks, which can lead to diminished profits and higher operational costs. Regularly reviewing pricing strategies and employing technology to automate risk assessment can help businesses better manage these challenges.
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