The future of global payments

The world of expenses and payments will evolve through a global transformation over the next five years and be reshaped by technology, regulation, changes in the global currency landscape, and evolving generations in the world of business.

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The payments market is already being altered by new types of payment providers. Business Process Outsourcing (BPO) companies continue to provide alternatives to the traditional A/P function. These BPOs combine process rigor with leading-edge technology and analytics to enable a more effective A/P function. This results in greater visibility of historical and in-status documentation via Document Management Systems (DMS). The use of these systems helps to improve the flow of information, trigger future actions, and reduce the reliance on paper and manual process.Currently, the US and Europe exhibit relatively modest adoption of new payment technologies, possibly because development is hampered by the existence of legacy technologies and the perceived effectiveness of current solutions does not motivate a quicker adoption of new models. However, by 2020, it is predicted that these markets will have caught up and achieved greater alignment with other countries and markets more open to new technologies.The use of alternative payment systems and technologies also helps in the area of compliance. Costs related to non-compliance can cripple an organization if the mobility professionals are not aware of the significant and growing risks of failing to comply with tax, payroll, and immigration rules. One of the greatest compliance challenges companies face is the separation of relocation expenses from business expenses. Outsourcing the payment function can streamline processes and more effectively separate these expenses, resulting in increased compliance. However, as we rely more on electronic receipts in lieu of paper, it will become critical to define and validate what constitutes proof of payment.Global demographics will play a vital part in shaping the world of payments. We see developing markets are leading the way, with countries such as Brazil, India, and China fueling demand for technology-driven transaction methods. These markets are also experiencing a rapid transition from a cash society to “cashless.”The growth of new technologies will spur changes in the area of regulation. Currently, many emerging markets present barriers to conducting business due to tight currency restrictions. As these markets continue to grow and attract business, most will see a loosening of currency restrictions resulting in a more efficient flow of payments and funds between global markets.An “end-state” view of the world of payments depicts a vast landscape of capability and added value, underpinned by technology, including:
  • Increasing alignment in the capabilities and expectations of companies and service providers
  • High levels of integration in global payment, tracking, and reporting systems
  • Real-time access, flexibility, and delivery of information for the end-user
  • Accurate reporting through the effective leveraging of open source technology and “big data”
  • Shorter processing and payment timeframes
  • Enhanced visibility in response to more uniform regulatory requirements
Mary Beth Nitz is vice president of global consulting at Altair Global.

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