How PSPs Can Leverage Payment Solutions to Overcome FX Challenges
Today’s global economy is vast and tumultuous, yet ripe with opportunity.
For merchants and businesses striving to expand their operations abroad, the key to success lies in finding the right tech-based solutions that help them overcome the hurdle of foreign exchange (FX).
From a payment service provider (PSP) perspective, FX hurdles pose a two-sided challenge.
On the one hand, PSPs must consider how FX requirements impact their merchant clients and how to alleviate these challenges. Meanwhile, PSPs must also determine how they will maintain a flexible payment infrastructure to not only support clients but also scale and grow their own businesses.
To achieve sustainable growth and scalability, the essential task for PSPs is to focus on building a more resilient tech infrastructure — or to find a tech partner that can help with such an implementation.
What FX Challenges Do Payment Service Providers Face?
Before a PSP can begin solving for FX, the first step is to highlight which key challenges stand in the way of innovation.
As we touched on above, FX challenges for PSPs can be viewed as a two-sided coin:
1. Client Expectations & DemandsWhen thinking about FX from the client’s perspective, merchants look to PSPs to provide them with a variety of services that enable faster and more affordable cross-border payments and FX processes. As a result, PSPs must determine the best strategy for providing such services while also managing their own FX exposure.
2. Business Scalability & Growth
The consideration of FX exposure for PSPs highlights the need for more innovative and customised solutions that take into account the specific risks of each client, rather than treating all FX risks as one and the same. This requires PSPs to either put hefty investments into in-house technology implementations or to partner with technology providers, such as fintechs, that offer solutions tailored to the needs of FX and cross-border payments.
How PSPs Can Leverage Fintech Partnerships to Meet Client Expectations
The lines between the fintech and payments industries continue to become more blurred — but why?
Part of this ongoing integration of fintechs into the payment industry may lie in the increasing shift toward eCommerce, as more PSPs are expected to facilitate FX processes and cross-border payments.
According to PWC’s Payments 2025 & Beyond survey findings, 89% of survey respondents stated a belief that this shift toward e-commerce would only increase in the coming years, while a further 86% agreed that collaborations between traditional PSPs and fintechs will be a main source of innovation.
Fintech partnerships ultimately hold a tremendous level of power and potential for PSPs that choose to leverage them. For example, by partnering with a fintech provider specialised in FX services, traditional PSPs can gain access to better and more transparent pricing with no hidden fees. It also enables them to unlock more currencies and markets as more and more fintechs are partnering with banks to enable services via API connectivity.
In turn, PSPs can then establish a better approach to addressing liquidity management and risk diversification while still scaling their business to accommodate increasing cross-border business affairs.
Final Thoughts: Finding the Right FX Tech Provider as a PSP
For your PSP to achieve international growth and scalability in the next few years, finding a trusted FX technology provider is a vital piece of the puzzle.
Fintech providers have become more diverse, as the fintech industry as a whole continues to expand its reach into the payments industry. To help PSPs overcome FX and cross-border challenges, fintechs specialising in FX can serve as a critical source of support for not only meeting customer expectations but also helping keep operational costs and FX risks lower.
At Freemarket, our payment technology is made for this very purpose.
Through our platform solution for cross-border payments and currency exchange, PSPs can leverage the advanced technologies they need to scale without sacrificing efficiency. Plus, our technology provides key capabilities that streamline FX processes and enable cost-effective payment routing to the optimal payment and banking networks.
By consolidating banking and payment solutions into a single API-enabled access point, Freemarket helps its clients better manage global liquidity, FX rates, and real-time prices in a single view and platform. Our platform offers lower costs through its high-volume currency aggregation system and API technology that enables clients to create their own ‘business-to-business payments ecosystem’. The platform allows customers to get pricing close to currency market rates by creating a liquid internal market which matches buyers and sellers of currency through the netting of incoming payments.
With access to 100+ currencies across more than 200 countries, and access to compliance and risk services, Freemarket is the ideal fintech provider for PSPs looking to establish business resiliency through scalable and innovative technologies.
Get in touch with our team today to find out how the Freemarket platform can help you overcome FX challenges today.
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