The Power of Global ACH and RTP

As payment methods advance from traditional banking to digital platforms, there is a shift towards faster, more reliable and cost-effective transaction solutions and a growing need for cross-border payment solutions like global ACH payments and real-time payments (RTP). Although RTP and similar technologies are expanding, they have yet to achieve global coverage. However, where available, they significantly enhance the ability of businesses to optimise global transactions for cost, speed, and convenience, providing significant savings compared to wire transfers.

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The 2023 State of B2B Cross-Border Payments

Uncover the B2B payments landscape and learn why business leaders are turning to fintech to deliver cross-border growth despite economic uncertainty.

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State of Cross-Border Payments Cover

Rapyd’s State of B2B Cross-Border Payments report states that cross-border fees can average between $10 and $25 per transaction. Despite high costs and fees associated with international wires, the data shows wire transfers remain a top payment method: 

Chart: top payment methods

For businesses wanting to save big, switching to ACH and RTP can reduce costs, while RTP also increases the speed of transactions.

What is Global ACH?

Global ACH refers to using local clearing houses to facilitate bank transfers between participating countries. Unlike international wire transfers that are costly, Global ACH offers a lower-cost, efficient alternative. Global ACH could be the solution for businesses keen on keeping costs low and are not hard-pressed about speed. By leveraging networks like the National Automated Clearing House Network (NACHA) in the US and the European Automated Clearing House Association (EACHA) in Europe, Global ACH simplifies cross-border payments. Global ACH serves as a good solution for B2B payments and B2C payments to workers and contractors.

What Is RTP?

Real-time payments (RTP) represent innovation in payment technology by facilitating the immediate transfer of funds between banks, businesses and individuals. While not yet accessible globally, RTP systems are available 24/7 and ensure instant payment confirmation and fund availability, making them ideal for urgent transactions. The non-reversible nature of RTPs increases security for the receiver, reducing businesses’ exposure to fraud. Additionally, RTPs enhance operational efficiency by standardising message and payment notification formats, which helps automate reconciliation processes.

How International Transactions Are Costing Businesses

Businesses engaging in cross-border transactions often face challenges leading to significant costs, primarily due to inefficiencies and the high costs associated with traditional financial systems. Here are some areas to look out for: 

High Transaction Fees: High fees for international transactions, such as currency conversion and service charges by traditional banks, erode profits, particularly for businesses with many cross-border payments.

Unfavourable Exchange Rates: Currency exchanges at banks can include non-competitive rates and undisclosed markups, raising the expense of international transactions

Delayed Transactions:

Cross-border transactions can be slow, taking several days because of the many intermediaries and the complexities of global banking, resulting in lost business, supply chain issues, and increased tracking costs

Exposure to Fraud and Risk 

Cross-border transactions are more vulnerable to fraud and incur higher compliance costs. Businesses need sophisticated identity verification and anti-money-laundering tools to ensure they maintain compliance with national and international standards and avoid enabling criminal activities or becoming the victims of fraud.

Operational Inefficiencies: Managing cross-border payments often involves maintaining multiple banking relationships or using specialised financial services, increasing administrative complexity and costs. Manual interventions for reconciliation and errors in international payments can lead to inefficiencies and costly mistakes.

Addressing these issues requires modern, purpose-built international payment solutions. The ability to see and confirm foreign exchange rates before initiating transactions and the ability to choose from a variety of payout methods is required to optimise your global disbursement strategy. 

Reduce Fees with Local Clearing and RTP

If you’re relying on wire transfers for international disbursements, costs and complexity could be adding up in ways you don’t see. These use cases illustrate how adding additional payout methods can lower costs, improve cash flow and reduce the amount of time your business spends managing payments. 

If you’re relying on wire transfers for international disbursements, costs and complexity could be adding up in ways you don’t see. Incorporating additional payout methods can significantly lower costs, improve cash flow, and reduce the time your business spends managing payments. Use cases for RTP and global ACH payments can reduce costs considerably where and when available. However, it’s important to note that these methods do not yet have coverage in every country, which may limit their applicability depending on your business needs.

eCommerce: Global ACH allows eCommerce businesses to pay suppliers efficiently, reducing wire transfer fees. Similarly, RTP networks can reduce costs and build loyalty and preference with suppliers that consistently receive payments promptly with lower fees.

Gaming: In the gaming industry, RTP provides players with immediate access to winnings, which can boost platform loyalty and repeat play. Global ACH payments can be used to disburse large payouts cost-effectively.

Marketplaces: Using global ACH to send funds to sellers on your platform ensures lower transaction costs and simplifies the payout process across different countries. RTP can facilitate real-time payouts to merchants in a growing number of markets globally covered by RTP networks. 

Creator Economy: Content platforms can utilise global ACH for regular, batched payouts to creators globally, minimising payout expenses. RTP can rapidly compensate creators, encouraging continued collaboration.

OPTIMISE EVERY TRANSACTION WITH RAPYD

Navigating the global payouts landscape can be complex. With Rapyd Disburse you can choose the right payout method and currency for every transaction from our unrivaled global network of bank transfers, RTP networks, card payouts, ewallets and more..

Reach 190+ countries, with same-day or faster delivery in 80% of global locations.

Rapyd helps you master global payouts.

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