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Global Collections – the latest solution by Cashfree Payments, in collaboration with YES BANK, is all set to simplify cross-border payments for Indian exporters.
Indian exporters and merchants who sell abroad, or want to sell abroad, can now easily collect international payments. Our latest offering ‘Global Collections’ challenges the existing traditional payment infrastructure in a bid to revolutionise cross-border payments for Indian exporters.
So, we had a launch session for the same in a webinar where we discussed the pain points that exporters face and how our solution may help.
Our panel of experts on the webinar were Reeju Datta (Co-Founder, Cashfree Payments), Malay Vaishnav (Associate Director, Cross Border Solutions, Cashfree Payments), Ajay Rajan (Country Head, Transaction Banking & Digital Transformation, YES BANK) & Vivek Venugopalan (National Head, Cash Management Product & Digital Transaction Banking, YES BANK). On the eve of the product launch, the panelists discussed the benefits that exporters can enjoy from our one-of-a-kind partnership.
This blog brings you a brief synopsis of the webinar on Simplifying Cross-Border Payments for Indian Exporters that highlights the key features of our new offering – ‘Global Collections’.
Simplifying Cross-Border Payments: Need of the Hour
India is gradually growing as a manufacturing and services hub, particularly in the Micro, Small & Medium Enterprises (MSME) sector. It is one of the fewer markets in which exports are growing even in times of global economic slowdown.
Ajay Rajan1 from YES BANK shared some statistics – this year, exports (merchandise) have 13% year-on-year growth while service exports have 27% growth. Talking in numbers, it is around $770 billion and 330 billion respectively. MSMEs contribute largely to our global exports.
On the other hand, the gig economy is on the rise which is centered around digital apps. It will give phenomenal growth to exports as well. India has around 8 million gig workers which may shoot up to 23 million by 2030.
Ajay said, “The reason I have shared these numbers is that our product – ‘Global Collections’ is going to greatly benefit these two sectors.”
So, merchandise, export services, as well as the gig economy are the various cohorts of exporters.
Therefore, it is a pressing need at the moment to simplify cross-border payments for Indian exporters and make it easier for exporters to promote international trade.
The government is keen on promoting exports and earning more forex (foreign exchange). It reflects in the policies as exporters have tax and GST exemptions.
The regulator, that is, the RBI has been making proactive guidelines for promoting and simplifying cross-border payments. Simultaneously, fintechs like Cashfree Payments are taking the initiative to provide solutions along the same lines.
But, the question comes up what are the challenges of cross-border payments that we need to simplify and how? Let’s dive into it!
Challenges of Cross-Border Payments for Indian Exporters
Highlighting the challenges Reeju Datta2 said,“With any kind of cross-border payments, the challenges lie around the cost of payments, the speed and transparency of transfer and the compliances as well as documentation associated with it.”
Let’s understand in detail:
- Higher Cost on Cross-Border Payments: Traditional ecosystem results in a lot of cost for both payers and exporters. Whether banks or popular third-party payment providers process cross-border payments, charges are considerably higher
- Limited Coverage of Currencies & Countries: Usually, there is a limitation on what currencies exporters can accept and the countries they can receive payments from. This often depends on the individual’s bank’s capacity
- OPGSP Compliance and FIRA Limitations: Online Payment Gateway Service Providers (OPGSP) must comply with the guidelines that the RBI lays down. Other than that, FIRS/FIRC – Foreign Inward Remittance Statement/Certificate* for received payments is mandatory. For example, the export of goods & services should not exceed the value of $10,000 per transaction. This is the limit that the Foreign Trade Policy permits. Now obtaining this statement may take around 10+ days. However, many banks especially the smaller ones make customers run from pillar to post while several solution providers take a lot of time to issue them.
*FIRC is a document proof for any foreign transfer to India, in case of export of goods. For the export of services, there will be no tax levied if a FIRC is available with the business. FIRC is also important to avail export-related schemes such as EPCG (Export promotion capital goods) and others.
Malay Vaishnav3 added, “I call them the ‘3Cs’ – the three challenges of cost, coverage and compliance.”
What is Global Collections? Features & Benefits
Global Collections is a cross-border inward remittance solution by Cashfree Payments. It is a technology payments platform that is built for exporters who want to receive international payments.
This solution is recommended for exporters who are dealing in goods or services having invoice values of up to $10,000.
Businesses that can use our solution are:
a) Exporters of goods and services
b) Neo-banks and fintech companies
c) Freelance platforms
d) E-commerce marketplaces
When we talk about cross-border payments, there are a few crucial aspects to consider:
- Cost of Payments
- Speed of transfer
- Transparency
- Compliance
- Documentation
‘Global Collections’ is a product co-created by Cashfree Payments and YES BANK that hits the nail on the head as far as the above-mentioned pointers are concerned.
It is aimed at reducing costs and passing the bulk foreign exchange discount to the exporters. While we want to make the global reach more accessible for exporters where they can accept payments in multiple currencies. We also want to ensure speedy transfer and payment settlement keeping the TAT (turn-around time) to a maximum of 2 days.
At the same time, easy documentation with transparency and all processes being compliant with RBI norms are inevitable factors.
Features of Global Collections
‘Global Collections’ provides international wire transfers at a low cost. It simplifies inward remittance cross-border payments, which lets the exporters focus on business expansion in the foreign landscape than worrying about international payments.
Here are a few things to know:
- Cashfree Payments offers hassle-free onboarding with the requirement of few details, for example, the GST company plan
- For YBL (YES BANK Limited) customers, it requires minimum KYC for onboarding
- We have complete API-based processing and quick support for our customers
Our inward remittance solution for exporters places control in their hands who earlier needed more transparency and confidence in the underlying transactions.
Benefits: Why exporters should use Global Collections by Cashfree Payments?
Well, here is a list of benefits that explains how our solution can simplify cross-border payments for you:
1. Competitive Rates
The flexible pricing structure of our cross-border solution can cut down on heavy COSTS. Save more than 50% on international wire transfers as we offer competitive rates compared to traditional banking and popular third party platforms.
2. Receive Payments in All Currencies
With Global collections, you get a higher COVERAGE. You can receive payments in 30+ currencies from 100+ currencies.
When you receive payments in USD, CAD, GBP, EUR, etc., you receive them in your local receiving accounts.
By local receiving accounts, we mean just like there is NEFT in India, there is ACH in the US or EFT in Canada. Likewise, SEPA in European Union and Faster Payments/FPS in the UK.
3. Sell Globally, Get Paid Locally
Traditionally exporters in India have been receiving payments via SWIFT. With Global Collections solution, the exporters can get 5 dedicated local accounts – in 4 currencies namely USD, GBP, EUR and CAD and also a Global SWIFT Account to accept payments in 30+ currencies.
Thus, an exporter can get paid via the payer’s local rails instead of SWIFT.
4. International Payments’ Settlement in INR
Business merchants and exporters can get their international receivables in Indian Rupee. It will be through automatic conversion irrespective of the currency in which payment the customer makes the payment.
5. Simplified e-FIRS Issuance
Cashfree Payments simplifies the entire process of getting FIRS (Foreign Inward Remittance Statement) for all international receivables. This makes documentation easier for exporters and merchants to avail of tax exemptions. Our AD-1 (authorised dealer-1) partner will issue eFIRS on a T+1 basis.
‘T’ is the day on which the beneficiary receives the payment in his/her bank account in India. The e-FIRS will be sent via email to your registered email address. Thus, we keep you sorted in terms of COMPLIANCE.
6. Transaction Notifications & Easy Reckoning
The Cashfree dashboard gives you an easy reckon based on time, currency type and remitter name. You also get real-time notifications for your incoming payments. You can check on delays and view your receipts getting an insight on revenue flow and working capital. This helps to make business plans for expanding your footprints in global markets.
So, get access to instant credit, traceability of payments on the dashboard and instant email/SMS/Whatsapp alerts with our solution.
Vivek Venugopalan4 concluded, “we have put up a gamut of things – a set of enablers together and the greatest benefit it brings to the table is that exporters can focus on their core competencies than worry about the receipt of money.”
Wrapping It Up
The webinar-cum-launch session of Global Collections was centred around how it simplifies cross-border payments for Indian exporters. It empowers them to have real-time access and control over their payments and collections journey.
The panellists talked about the various attributes of our inward remittance solution that can overcome the challenges of payment collection that exporters encounter. It can help streamline international payment collection.
Exporters can enjoy the advantages of direct account credit in multiple currencies, instant transaction status, real-time processing, on-demand e-FIRC, support of all major local rails, and many more.
Cashfree Payments is committed to fuelling India’s export growth story by providing affordable and top-of-the-line international payment infrastructure. While we take care of the payment collections for exporters, they can focus on their business and its expansion.
