Airwallex - The seamless payments stack: How payment operations now enhance - not hinder - global software businesses

Digital native software businesses who operate across global markets are increasingly finding themselves at odds with traditional high street banks. Every day, finance teams are battling against slow systems, fractured setups and unnecessarily expensive fees.

 And if you’ve got an existing global footprint or growing across borders? Double the pain.

 But it doesn’t have to be this way. Keep reading to find out how you can consolidate, streamline and optimise your financial operations, enabling you to efficiently move money globally, get control over your global cash flow and win customers globally.

An end to clunky systems

International payments can feel like the great unknown for Software as a Service (SaaS) companies. As you scale globally, you enter a minefield of unaccounted for transactions, time delays and surprise fees. It’s a recipe for an overwhelmed finance team.

The problem is a lot of legacy banking partners aren’t properly equipped to operate across borders or serve the particularly fast-moving SaaS sector that expects agility and intuition from their providers. 

And international payments can’t be managed in the same way as domestic transactions. 

When moving money across borders, businesses are exposed to FX fluctuations and higher transaction fees. Traditional banks will also often have be using pre-agreed correspondent banking relationships to route funds and tend to provide less visibility over processing times.

If your finance team is moving money across borders, you don’t want them hindered by inefficient, clunky systems. The hours wasted searching for physical receipts and scouring card statements to manually reconcile accounts suddenly stack up.

In search of simplified payment processes and streamlined operations, a lot of SaaS businesses are moving away from traditional banks and opting for cross-border payment platforms where they can manage and track payments globally, integrate their accounting software and reconcile accounts in real time.  

Quickly operationalise new markets

 Time to market can be everything for a SaaS company. A new customer wants to purchase from you in Canada, or an exciting opportunity comes up to expand into Australia.

Your product is ready, but your financial operations are not. Your bank is taking months to set you up with an overseas business account because it has to ask a local bank in that region to provide foreign currency services or demands a director on the ground. 

 What are your options? Delay your launch or ask customers to pay in a different currency?

Not only do slow, clunky banking systems risk losing paying customers and fumbling first impressions, they also stop fast-growing companies from strategically ‘testing the water’ in a new market.

Likewise, it’s worth evaluating your payment gateway or acquirer. They can most likely accommodate major currencies, but do they auto or force convert to your home currency?

A fractured payment infrastructure can also cause recruitment headaches. If you want to hire software developers and designers in India or Eastern Europe, chances are they will want to be paid in their local currency.

Even if you can pay them in their local currency, with a high street bank you’re likely charged excessive FX rates – more on those below - which can seriously dent your profit margin.

Finding a financial partner that offers global flexibility and frictionless customer checkouts is becoming increasingly important for companies operating overseas.

Take the risk out of international payments

 As you expand it becomes harder to track what transactions are being made, where, and by whom.

If your bank only gives your finance team one shared login to its online platform, it’s difficult to keep your team empowered and/or accountable. You could also face compliance and reporting issues, as well as security risks.

As you grow, you need transparent oversight over your global operations. A financial partner that offers customisable user access for your finance team can help you track where funds are being spent at all times.

It’s also likely you’ve been acquiring tactical point solutions to solve region-specific or process-specific problems; you’re suffering from tool sprawl. Not only is tool sprawl inefficient and costly to manage, it also means a lack of system fluency and synchronisation. 

To minimise administrative, tool and team risks, businesses should consider consolidating all financial tools into one solution across markets and processes, which drastically reduces costs and time overheads, and also provides greater transparency and data insight.

Optimise your FX hygiene and avoid unnecessary fees

Security and compliance aren’t the only risks facing global software businesses moving money across borders. Hidden transaction and FX fees can eat into profit margins, and make it hard to produce accurate financial reports and plan for the future.

Too often companies are left hoping they’ve sent or will receive the correct amount, because traditional banks don’t give real-time visibility over how much it costs to send money overseas. Or how long it will take.

 It’s not uncommon for companies to write off small FX discrepancies when customer payments come up short, because they aren’t worth chasing down. But it all adds up, especially if the exchange rate is volatile.

How SaaS businesses avoid the conversion trap 

Then, you’ve got the conversion trap. Bad FX hygiene can be a big problem for SaaS companies who collect and send money globally.

It’s easy to inadvertently end up paying to convert the same currency twice, paying a 3-4% conversion fee with each transaction. 

Let’s say you’re a UK-based company and a US customer pays you in USD. You have suppliers you need to pay monthly in the US, in USD.

Here’s what often happens:

1. Your US customer checks out in USD

2. That USD is automatically converted into GBP by your acquirer/card network (also called forced conversion)

3. You receive GBP in your local bank account from your acquirer

4. And, a few weeks down the line, you have to convert GBP to USD to pay your supplier in the US.

In this scenario, you would have converted your USD twice… inefficiently.

To save money and avoid draining your internal resources, good FX hygiene would be to pay your supplier from the same USD currency pot that your US customer paid you in, rather than converting (and being charged) twice. 

In the past, companies used to set up legal entities and a business account in each market to avoid paying double FX fees. Now you just need a financial partner that allows you to collect and hold multiple currencies centrally without being subject to FX fees, and spend funds as and when you need.

Customer deep dive: How ApprovalMax took control of their global finances

Approval flow software company ApprovalMax saved 3.5% on international payment fees and 20% in FTE capacity by switching to Airwallex.

The global company is headquartered in Germany but operates in 24 countries. When it started scaling, it faced:

• High FX fees when collecting revenue from global customers and paying suppliers

• Slow processing times for international transactions, including staff wages, and;

• Wasted admin time and unnecessary fees when managing staff expenses across borders.

ApprovalMax needed a cost-effective, flexible and transparent end-to-end financial partner to support its growth. 

Using Airwallex’s Global Account, the finance team can now collect, hold and send multiple currencies around the world without paying substantial FX fees. The full-featured business account lets companies instantly open a local currency account in 12 jurisdictions and accept payments from 180+. 

To simplify and streamline global employee expenses, businesses like ApprovalMax also benefit from Airwallex Borderless Cards. Employees can spend globally with no international fees and inbuilt expense management software allows the ApprovalMax team to keep track of all global spending in one place.

Grow without limits

Thankfully, software businesses now have a choice when it comes to finding the right payment platform to help them scale globally.  

If you’re looking for ways to streamline your operations and save money in today’s macroeconomic environment, you’re not alone. Having one platform that gives you a quicker, smoother and cost-effective way to move and manage money globally could make the world of difference.