How do cross border payments work in Singapore?

Apr 05, 2024

Healthy employer-employee relationships are the cornerstone of good business practices. Many countries have a dedicated set of legal regulations that govern this relationship, making sure it is maintained in a fair and stable manner.

The employee benefits Singapore government stipulates work to ensure that the employee rights Singapore’s working population deserves are upheld.

While at the same time, they also ensure that businesses in the country are protected from unfair labor practices.

Are you sure your business is doing all it can to uphold employer-employee values? Are you investing in all the government schemes that are necessary in Singapore to save employees' expenses?

Regardless of where you stand on these questions a working knowledge of employee schemes could be potentially useful.

How do cross border payments Singapore work?

The advent of high-end fintech institutions and service centers has revolutionized the way payments are processed traditionally.

What has been initially dominated by traditional banks is emerging in the hands of modern financial institutions and opening doors to the birth of sophisticated, expensive payment infrastructure. 

Cross border payments happen when the sender of the funds and receiver are from different countries. Earlier in Singapore, banks were the primary places that helped send money outside the country.

In later stages, private financial institutions like Transferwise and Western Union came into the picture and processed cross border business payments.

But these are expensive, not easily accessible, and take a long time depending on the country you are sending the payment. In a business setup, one cannot wait or explain to an international supplier why their payment is delayed.

Then came the era of PayNow, a safe and secure cross border payment system working with the nine topmost banks of Singapore. Created to empower Singapore companies to make cross border fund transfers without time delays and constraints.

PayNow also ensures the privacy of the involved parties. You can send/receive money without using the other party’s banking information. Once you register with PayNow using your bank account details, you will receive a UEN.

This unique number is enough to send money to an international vendor or receive money. The user can also make cross border business payments by scanning the QR code.

Your banking details and confidentiality are safe now as you don’t have to share them with anyone to finish a transaction. 

Like PayNow, another most common cross border payment infrastructure that business users utilize is SWIFT GPI (Global Payments Interface).

SWIFT GPI is an initiative developed to facilitate fast and secure payments in the APAC region. Working with the DBS bank and the Commonwealth Bank of Australia.

This method is the future of cross border payments, and it sends out instant payments and enables follow-ups and updates once the money has been credited.

Singapore, the land of startups, is encouraging financial institutions to give banks a run for their money by continuously innovating and revolutionizing the payments industry.

Types of cross border payments in Singapore

Cross border fund transfer is broadly classified into three types based on the type of transaction and parties involved.

1. Business to business payments (B2B)

One of the most common types of cross border payments is this that happens in-between one business and another from two different countries.

The outcome of ultra-fast globalization has made every business expand their operations beyond their borders and trade with businesses from other countries.

Cross border business payments not just help them develop their business and earn huge revenue but also strengthen their global trading policies.

In general, banks, payment applications like Swipe, Transferwise, and agencies like Western Union act as a bridge between B2B cross border payments.

2. Consumer to business payments (C2B)

Pushing international remittance agencies like Western Union and Ria to the back, modern fintech solutions and payment wallets are on the rise, enabling customers to connect with businesses from other countries.

It can be an international tour package booking fee, imported goods shipping fee, or stock investment costs. Customers generally do wire transfers that can take up to three to five days or use wallets to transfer money to pay the business.

3. Business to consumer payments (B2C)

One of the least known and used types of cross border payments is B2C transactions which happen when a business entity pays an individual from another country.

Hiring freelancers and part-time workers from other countries are more prevalent. Paying their charges and wages will come under this category.

Customer rebates, interest on savings schemes, contest prize money, etc., are also business-initiated cross border fund transfers.

How fintech companies in Singapore are simplifying cross border payments?

We have already seen how Singapore has made sure that businesses get the support and infrastructure they need to go global and handle finances smoothly. Here is how the country makes cross border business payments smoother, simpler, and quicker.

1. Easy remittance to APAC countries

The APAC region is the hub for startups and mid-sized companies thriving and eager to collaborate with other businesses to grow.

Each country in this region is rich with high-speed payment networks and diverse payment modes, powering businesses to procure and trade with international vendors.

Singapore has interconnected its domestic payment network with Thailand’s to make it into a cross border payment path. Likewise, it has activated different technological solutions to fuel cross border payments with other APAC countries.

These are the regions where contactless payments and mobile wallets are ruling and are most used by both consumers and businesses.

Singapore is connected with each of these, making it easier for the companies there to make cross border fund transfers.

2. Increasing speed and real-time visibility

Businesses no longer need to go to a physical location or kiosk to deposit their remittance, nor do they need to wait for a week or more to get delivered.

Current payment methods send cross border payments with a few clicks and keep the sender informed about the status.

For any failure, the sender is updated right away so that they can share the inconvenience news with the receiver and initiate the transfer again.

Real-time visibility is indispensable for businesses that make more than ten cross border business payments every day.

3. Decreasing fraud through vendor data management

As cross border business payments solutions are specially built for companies, it lets them store the payment records and vendors' master lists.

This way, the accounting team prevents duplicate payments and payments from going to the wrong destinations. 

4. Helping mitigate risks

Fast and efficient cross border transactions should also be risk-free. You can never compromise your safety and privacy to send payments a little faster.

Fortunately, Singapore has highly innovative and futuristic fintech solutions in place that keeps risk and threats away from your bank account and payment system.

Not using bank account details safeguards your primary savings account from perpetrators. Swift, cross border payments are safe, trackable, and transparent only to the sender.

Additionally, cross border business payments are sent through an end-to-end encrypted path through trusted partners who comply with strict regulations. Hence, the security and privacy of your money are valued.

How does Volopay enable seamless cross border payments?

Though all types of cross border payments are already established in Singapore, concerns like high and hidden fx costs and risks of exposing confidential information continue to thrive.

Volopay, being a prominent business payment solution in Singapore, noticed these challenges and gaps in making cross border fund transfers.

It has partnered with Nium, a global payment management platform, and tapped into its fast and accelerated global money movement infrastructure.

This partnership has allowed Volopay to process seamless cross border transactions without delays and with low fx costs. Hence, businesses that hire Volopay to pay international bills aren’t forced to spend more while clearing international payments.

With Nium’s transparent global movement costs and strict regulations to mitigate payment risks, businesses can send funds safely and securely anywhere in the world.

Volopay also has an organized vendor management system where the vendor list can be onboarded and stored. The administrator can see what happens from the moment a cross border payment is initiated.

With the help of advanced payment gateway platforms like Nium, Volopay equips businesses with international Visa cards that can be used as corporate cards to make online payments with advanced options like freezing and unblocking cards and spend controls like budgets for each cards. 

That’s how Volopay takes care of your cross border business payments and payment management and automation, not accompanying high costs, unexpected payment delays, and zero risks.

Suggested read - 4 best ways to start shipping from China to Singapore

Manage multiple cross border payments easily with Volopay