A South African fintech known as Verto offers citizens cross-border payments to break any payment barrier.
Fintech solutions such as Verto are the key to overcoming hurdles associated with making cross-border payments in light of many obstacles.
According to the analysis conducted by McKinsey, the percentage of non-cash retail payment transactions would increase by 13% between the years 2018 and 2021.
This rate jumps up to 25% in developing countries such as Morocco, Nigeria, and South Africa.
Businesses in South Africa that want to expand their operations beyond the African continent to places like Europe and the United States frequently run into a tangle of difficulties along the way.
According to research that was published by McKinsey Global Payments the previous year, these businesses have to contend with difficult challenges within the conventional banking environment. Some examples of these challenges include regulatory limits, lengthy transaction durations, volatile exchange rates, and unanticipated expenses.
“The volatility of currency exchange rates poses a significant concern. It can undermine the profitability and interfere with the strategic planning of businesses engaged in international commerce,” the report declares. The value of trade between South Africa and the European Union reached a substantial €26.4 billion in 2022, indicating the potential impact that such fluctuations may have.
Businesses risk having their development and profitability stifled by delays, which makes it more difficult to implement strategic expansion plans. According to a research published by the World Bank, the cost of sending payments from South Africa is among the highest in the world, averaging 15.05%, whereas the average cost of making payments worldwide is 6.24%.
Read also: Mastercard, Xsolla partner to facilitate payments for video games commerce
Remarks from the CEO of Verto
“By harnessing innovative financial technologies, we can surmount barriers, streamline international payouts and currency conversion, and facilitate frictionless cross-border payments,” stated Ola Oyetayo, the Chief Executive at Verto
“For example, our cross-border payment service is a groundbreaking instrument tailored to simplify complex payment landscapes. It empowers companies to conduct transactions rapidly, transparently, and efficiently, enhancing their global growth trajectory.”.
With the help of digital wallets and specialists in cross-border payments like Verto, businesses in Africa can manage regulatory compliance in a much simpler and more streamlined manner. Businesses are better able to plan for their expenses, manage their finances, and concentrate on expanding their operations and adding employees when the fee structures they use are straightforward and easy to understand.
“In this demanding economic landscape, businesses are continually pursuing competitive edges,” remarked Oyetayo. “Verto’s real-time conversion solution enables businesses to counterbalance exchange rate volatility with competitive rates for nearly 50 currencies. This is particularly critical for enterprises solidifying their footing in global markets. Trading in larger FX volumes further secures even better rates.”
“Enabling seamless transactions within the AfCFTA and EU markets will empower South African companies to seize growth opportunities, fuel international expansion, and cement their roles as global contenders.” Oyetayo added.
How businesses in SA can expand
Nevertheless, businesses in South Africa have a significant amount of room for growth, particularly in other parts of Africa and Europe.
There is a significant window of opportunity presented by the African Continental Free Trade Area (AfCFTA), which is one of the largest single markets in the world and has a GDP of $3.4 trillion.
In addition, the continuous expansion of economic links between South Africa and Europe, which is currently the nation’s most important trading partner, paves the way for broader market penetration.