Charles Rosenblatt has been a C-level executive in cross-border payments for more than a decade, including at leaders like Payoneer and Hyperwallet. He is currently president of Crossroad Commerce, a consulting firm focused on cross-border payments for businesses.

The landscape of global payments continues to evolve rapidly. However, many challenges within the global supply chain payments sector are unresolved. Let's examine the key pain points and possible solutions.

Challenge #1: Trust

• Can an exporter trust an importer they've never met, often located thousands of miles away?

• Is an importer willing to make an upfront payment for products they’ve never seen and that might arrive in a lesser quality than expected?

Trust between buyers and sellers in cross-border transactions has always been a delicate issue. This problem intensifies when there’s a large geographical distance between the parties, and when the exchange involves upfront payments without tangible assurances.

Though some companies offer background-checking services to vet potential business partners, establishing trust when money is involved — especially across borders — is a significant hurdle.

One of my Crossroad Commerce clients, Finkargo, has created a promising solution. By acting as a neutral intermediary, Finkargo allows the importer to make payment upfront — or take a loan to cover the payment —  while ensuring to the exporter that the funds are secured and available. This trusted middleman system fosters confidence between the parties and facilitates smoother transactions. Using global payments infrastructure, companies can enhance trust through a secure platform that can hold and disburse payments worldwide.

Challenge #2: High transaction costs

• International payments can be expensive and complicated for businesses around the world.

• Every participant in the supply chain has their own network of suppliers and partners, each requiring payments and coordination.

One of the most pressing issues in the payments landscape, the complexity and cost of cross-border payments is a key barrier for many businesses. Some companies struggle with Know Your Business (KYB) requirements and compliance issues, while others face hefty fees from traditional banking systems.

Companies like Payoneer and Airwallex are tackling these problems by offering global payment solutions at a lower cost. For example, a Chinese seller can open a U.S. dollar bank account through these platforms, enabling them to receive payments from across the globe without incurring excessive fees. Conversion to local currency incurs a reasonable fee, while internal transfers can be done at competitive rates. This saves money that would otherwise go towards paying downstream suppliers.

Another intriguing development is stablecoin technology. Stablecoins promise a faster and cheaper way to move money across borders, but they introduce their own set of challenges. While the transfer process itself is inexpensive, converting stablecoins into fiat currency for day-to-day business operations can also be costly. Additionally, the process remains cumbersome compared to traditional banking systems.

Challenge #3: Accounts payable and receivable tracking

• For small and medium-sized global suppliers, tracking both incoming and outgoing payments across different countries can be a huge headache.

• Delays in payments can hinder cash flow and disrupt the ability to keep business operations running smoothly.

One of the most important success factors for global suppliers is the ability to ship products quickly and consistently. For example, a supplier that can ship 1,000 units every three weeks (18 shipments a year) and will generate 50% more revenue than one that ships once a month (12 shipments per year). To maintain this level of turnover, suppliers need a faster and more reliable way to track payments and manage the payment supply chain.

Traditional ERP systems and manual tracking methods are no longer sufficient to meet the demands of today’s fast-paced global market. Companies like 40Seas are developing tools designed to help suppliers manage accounts receivable and track payments. These solutions help suppliers streamline their operations, improve cash flow and increase the frequency of their shipments. These efficiencies can, in turn, generate higher revenues.

Looking ahead: A path to real solutions

There are undoubtedly more challenges to be tackled within the global supply chain payments ecosystem, and we can expect continued innovation this year. The combination of addressing the trifecta of trust, cost, and tracking will be key to transforming the landscape.

If fintech companies and solution providers can address these issues effectively, they will successfully move the needle on real-world pain points that have long hindered global trade. Supply chain payment solutions need to be practical, scalable and  focused on the core pain points businesses face today