Cross Border Payment Data Customer Experience

Pay, Attention: Payments Data is Revolutionizing the Customer Experience

Long considered a secret weapon in the fight against complex financial crimes, payments data also leads to faster processing times and fewer payment rejections

Key takeaways:

  1. According to a recent study, optimizing the efficiency of financial crime compliance in payments is a significant part of enhancing CX.
  2. 4% of financial institutions consider this as critical.
  3. Leveraging payments data is the preferred way to enhance CX: 56% of financial institutions are planning improvements to data quality
  4. Papaya Global harnesses data to streamline compliance procedures, accelerate delivery, and reduce bounced payments.

There is a consensus among experts that payment data is the next frontier of customer experience (CX). A good illustration of this is the emergence of open banking – the practice of secure financial data sharing, at the client’s request, between banks and third-party service providers via application programming interfaces (APIs) – which has been hailed as the future of banking, fintech, and the entire financial landscape.

The broad spectrum of services enabled by open banking includes personalized financial management tools, faster approval of loan applications, and payment services. Authorizing third parties to access their bank account data to initiate transactions has undoubtedly upgraded CX; open banking payments – i.e., account-to-account transfers – are faster and less expensive than traditional payment methods, like card payments.

Cost-effectiveness and speed are not the only benefits of payment data. A recent study by LexisNexis Risk Solutions, a global data and analytics company, found that “data is the secret weapon in the fight against complex financial crimes.” The findings reflect the perspectives of 1,181 financial crime and compliance decision-makers across EMEA, APAC, North America, and Latin America:

  • The global annual cost of financial crime compliance for financial institutions exceeds $206 billion.
  • 85% of financial crime compliance executives say enhancing the customer experience is their top priority.
  • Optimizing the efficiency of financial crime compliance in payments is a significant part of enhancing CX. Globally, 74% of respondents consider this as critical.
  • 83% of organizations prioritize harnessing enriched payment data to combat financial crimes.

All the (data) pieces matter

Payment data enrichment is the process of adding information to raw transaction data (amount, date, and recipient) to provide more context. Enriched payment data can include brand name, category, and location. It is essential for transaction analysis, risk profiling, and regulatory reporting. In addition, notes the report, it leads to faster processing times and fewer payment rejections.

Unfortunately, payment rejections are a common phenomenon. When a business or financial institution initiates a transaction, it provides information about the originator and the beneficiary of the payment. If the information in the business’ ERP or payments processing platform is incomplete, outdated, or fails to meet regulatory requirements – which happens all too often – the payment will fail.

Avoiding failed payments requires organizations to pay more attention to data management. According to LexisNexis Risk Solutions’ survey, this is high on the agenda of financial institutions; 56% of respondents said their organization is planning improvements to data quality, topping the list of areas set for change over the next three to five years.

“Our report underscores that financial institutions are making significant investments to stay compliant with financial crime regulations, “said Grayson Clarke, Senior Vice President of Market Planning and Marketing at LexisNexis Risk Solutions. “Leveraging emerging technologies alongside existing solutions can empower institutions to achieve their objectives and deliver optimal customer outcomes.”

Protect and serve

One of these technologies is Papaya Global, the only fintech designed for cross-border workforce payments. As a regulated financial services company, Papaya performs Know Your Customer (KYC) and Anti Money Laundering (AML) processes for each new client and worker being paid via our platform – and runs rigorous screenings for every payment, every cycle, to keep clients’ funds and workers’ data safe.

All the data on Papaya’s platform is encrypted – at rest and in transit. The platform was built on overlapping systems, each of which can access only the information necessary for its part of the payment journey. One system might have the worker’s ID but not their bank details. Another might have the bank details but not the name. No person – not even top Papaya officials overseeing the process – can access all the private data.

The payment process starts with the client’s authorization. Once the amount has been authorized, the money is locked for transfer with an encrypted signature. The amount can’t be changed beyond the scope of the authorization. Any attempt to increase the payment amount or divert payments from their intended recipient would trigger a suspicious behavior alert.

Payment data is not only safeguarded but also optimally managed. Papaya runs daily simulations of the payment journey to ensure that salaries always land in recipients’ accounts on time. These “dry runs” identify any obstacle, including the possibility that screenings may require additional information, allowing the platform to determine the exact date the payment must be dispatched.

The result is an optimized customer experience: Papaya’s Workforce Wallet – the latest innovation in its suite of enterprise-grade solutions – accelerates the payment process by 80%, offers a remarkable 95% same-day delivery, and reduces bounced payments to less than 0.1%. In other words, the payments data-CX frontier has been conquered.