IIBF CYBER CRIME-FREE SHORT NOTES 2024 | ELECTRONIC TRANSACTIONS
PREVENTION OF CYBER CRIMES AND FRAUD MANAGEMENT STUDY MATERIAL FOR 2024
In this article, we will cover short notes on the Global Payment Processing from the Syllabus of Cyber Crime 2024. In this article, we will understand what Global Payments Processing is and how the system of Global Payments Processing works. We will know some of the important things that are there to know about global payments processing.
The system of global payment has been a recent payment Trend that has been responsible for an increased level of global e-payments in 2018. And as the businesses expand in global markets the number of global payments will increase.
This is a reason why we need to know more about Global payments and the processing of global payments.
And because of the increase in the international eCommerce market share, merchants who want to strengthen their market presence are looking to better in processing Global payments. Therefore, there is a need to partner with Global Payment processors to serve customers worldwide.
In simple terms, payment takes place between the two banks, where one bank is acquiring the payment and the other bank is issuing the payment, which is located in different countries. This way, if as a consumer you have to pay to someone who has a bank account outside of your country, then you would need to conduct a global transaction.
In other words, global payment processing is a term that is used to refer to the processing of the trade of goods and services in exchange for financial compensation between two parties across the globe.
DEFINITION: GLOBAL PAYMENT PROCESSING
The process of Global Payment is initiated towards the supplier, publisher, vendor or someone else who has a bank account with the bank outside of the country in which your business operates. Previously, global payments were processed by inputting data into multiple Bank portals which had high overhead fees and costs. There were even heavy conversion fees involved when processing Global payments to a supplier in foreign currency.
A common occurrence of fraudulent payment attempts in global payments was prevalent. It is said that Tipalti, a global payments leader, had mitigated the loss of> $4 Million because of enhanced fraud detection practices.
HOME / GLOBAL PAYMENTS HUB / GLOBAL PAYMENT PROCESSING
It is important to find a global processor of payments that is able to support a wide range of payment methods on a local level as well as to find a system that supports payments in different currencies.
A payment system that is based on SaaS can streamline the processing of the entire cross-border payments as well as improve the compliance of taxes while ensuring that there is a simple registration process in place.
When hopping aboard the mass global payments processing wagon, there are several key factors to keep in mind.
GLOBAL PAYMENT PROCESSOR
The mediator between two parties involved in international payment (mainly, merchant and customer), is known as the Global Payment processor. It will process the merchant’s credit and debit card payments as well as payments made with an alternative method.
TIPS FOR PROCESSING GLOBAL PAYMENTS
Once you have set up a system with a supplier or vendor, you must also discuss how the payments will be made because the payment system is impacted by various factors such as:
- The need for cash
- Country’s economic condition and the country importing the goods or services from
- The kind of product you are importing
- The formalities involved in the banking system
- Rates of currency conversion
- The creditworthiness of parties involved
- The requirement of the product
Before you select a system of Global Payment, you must enquire about the fees that are charged for making this payment. You might find that it’s best to send the payment which takes a little bit longer to process if you have a limited budget. There is also the need to confirm whether this supplier is legitimate before we make the payment. All this verification can be done by a global operator on your behalf.
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THE STATE OF CROSS-BORDER PAYMENTS
There has been a transformation in every aspect of Global Payment because of Globalization. As per research, the majority of international payment practices are not efficient and effective but still, local suppliers and vendors have no other option other than to use their system. Therefore, to ensure Global payments can be made efficiently and quickly without raising the cost of fees payment, the back-end payment operations must be refined.
The size of the organization also impacts the number of global transactions it makes. The larger the company, the larger will be its international transactions and payments. The industry in which the organization is involved also impacts the number of international transactions it makes. The below-mentioned companies involved in the following industries general you make a large number of cross border payments:
- Business services.
BUT WHY DO GLOBAL PAYMENTS FAIL?
Payment made on a global level takes a lot of time and energy. You have to remember that domestic and international payments are processed very differently and when accounts payable departments cannot handle them separately, it can lead to non-compliance and human errors. Account payable departments also have to ensure that the payments are accurately made and there is proper compliance with tax and regulations.
The reason for the failure of global payments is because the payee’s account and the routing numbers are most probably and third incorrectly into the system of payment. And when payment is processed incorrectly, it could take many days or even weeks to be corrected.
Therefore, there is a need to make the Global Payment process as simple as possible where suppliers can simply upload their account and routing numbers and choose the profit currency and payment method for the cross-border payments.
WHAT A GLOBAL MASS PAYMENTS PLATFORM SHOULD BE LIKE?
If you are to choose a global mass payment system you must look for a system which:
- provides ‘enterprise-grade financial controls’
- as well as check the ability where you can schedule thousands of payments at the same time
- compliance with cross-border remittance rules
- ability to conduct a number of payments at the same time
- and should confirm whether the system supports multiple payment methods.
It would be easy for a business to enter into business with you when they have the most preferred payment method to choose from. There are some suppliers which may prefer:
- Global Automated Clearing House (ACH) payments
- and others request PayPal or wire transfer.
Businesses that make a number of Global payments are definitely going to benefit from an automated Global payments platform. Having an end-to-end global system will automate their numerous tasks which are involved in Global Payment to make faster payments at low processing cost and thus, leads to better management of cash flow.
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