What Global Companies Can Learn from Asian Governments About Cross-Border Payments

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Which is more innovative, the private sector or the public sector? On the surface, the answer is obvious: in modern economies, the private sector is responsible for the majority of research and development activities. However, writes Dani Rodrik, professor of international political economy at Harvard University, “it is the public sector that provides the essential social, legal, and educational infrastructure that sustains private R&D.”

Private R&D is often subsidized by the state, utilizes government investment in science and research facilities, and hinges on the expertise of talent educated in universities supported by public funds. But it goes even further than that: most of the greatest inventions and companies of our time were initially backed by the public sector – the internet, Google, Apple, and even Elon Musk, who has frequently spoken out against government subsidies, received a $465 million loan from the U.S. Department of Energy.

Ok, so technological innovation is driven by a public-private partnership. But which sector is more adept at using innovative technology? Here, too, you would expect the answer to be the private sector, when it actually is often the public sector that is more willing, for various reasons, to implement new technologies. And nowhere is this more evident than in the cross-border payments space.

Let’s get digital

Just in the past few months, several governments in Asia – a region that has emerged as a global leader in digital transactions – have signed cross-border payments agreements. Nepal and India signed an agreement that will allow Indian tourists and business people in Nepal to make digital payments via e-wallets like BharatPe, PhonePe, Google Pay, and Paytm. This isn’t India’s first cross-border payments deal; in February, it launched a real-time link with Singapore to facilitate easier cross-border money transfers between the two countries.

Singapore, for its part, has already established a cross-border payments link with Thailand and recently launched a cross-border QR code payment link with Malaysia. Meanwhile, in the Persian Gulf, Bahrain is set to join the other countries in the region in a unified payments/settlement system. “The electronic platform,” said Hesa AlSada, executive director of banking operations at Central Bank of Bahrain, “will enable account-to-account transfers, purchases, and import to export, amongst others, without the need for SWIFT or corresponding banking protocols.”

Bahrain and other Persian Gulf countries want to bypass SWIFT and correspondent banks to protect their citizens from slow payments and hidden fees. The private sector also has citizens; they are called employees. They too often suffer from slow payments and hidden fees – especially in global companies that rely on traditional services and rails to make cross-border payments. These global companies have a responsibility to protect their employees. And one way to do that is to adopt innovative technology designed for payroll payments.

Get up to speed

Papaya Global built the first operating system that specializes in payroll payments. It relies on payroll-dedicated rails that, thanks to partnerships with tier-1 banks such as J.P. Morgan Chase and Citibank, ensure speedy delivery. On Papaya’s rails, all fees are known in advance, and our technology accounts for FX fluctuations as late as possible in the payment process, reducing currency conversion costs to a minimum. This allows us to guarantee full value transfer, meaning your employees receive every cent they are entitled to.

Another benefit of Papaya’s OS is that it streamlines cross-border payroll payments. The way it works is simple: when clients fund their payment accounts, Papaya holds the money in e-wallets. Each e-wallet holds one type of currency, but clients can open as many wallets as they need and seamlessly move funds between them. So if, for example, a company decides to make a change in its operations overseas and suddenly finds it has more than it needs in its euro wallet and not enough in its GBP wallet – it can simply slide the money over.

Since Papaya is licensed to hold and move funds in all major markets, transferring money between wallets doesn’t require an invoice and doesn’t need to be declared in a financial audit. Financial transactions that do need to be declared in an audit appear in monthly statements Papaya sends out – exportable to your accounting software – that list deposits and withdrawals, with line items showing which employees were paid in each country.

If that sounds like a bank, it’s because Papaya has all the capabilities of one – including bank-level security. We perform Know Your Customer (KYC) and Anti Money Laundering (AML) processes for each new client and for each worker who is being paid via our system. We run rigorous screenings for every payment, every cycle. And Because Papaya is a regulated financial service company via its foreign subsidiaries, all our clients’ funds are segregated in CMAs (Customer Money Accounts) and safeguarded.

In other words, it’s the only technology that can provide your employees with the same level of protection that some citizens get from their governments.