Re-globalisation: Time for businesses to adopt adaptive global payments
Traditional corporate payment systems are slow and inefficient and mean that companies will fall behind competitors in a new epoch that demands businesses must maintain agile and adaptable operating infrastructure.
Re-globalisation enables forward-thinking organisations to remap the business landscape and expand ambitions – but progress will be limited to the capability of the payment infrastructure.
Re-globalisation is the phenomenon of global economic power re-balancing periodically. It signifies shifts in economic dominance and the redistribution of manufacturing, technology, and services across regions.
It is driven by numerous factors in a post-pandemic world, such as changing trade policies, geopolitical tensions and dynamics – the fallout from the war in Ukraine is a prime example – and emerging market growth. Additionally, the global economic downturn and the advent of paradigm-shifting technologies are forcing business and political leaders to think differently.
These multiple factors trigger tremors that alter the business landscape and have significant implications for organisations operating in a globalised world. What worked yesterday is unlikely to be as effective today, and “business as usual” will be unprofitable.
Supply chain costs
One of the core impacts of re-globalisation is the transformation of supply chains, which have been stretched – and in some cases broken – by events of the last three years. As companies seek to optimise costs, diversify suppliers, and tap into emerging markets, supply chains are becoming more complex and geographically dispersed. But at what cost?
According to a recent KPMG report, 71% of global companies highlight raw material costs as their number one supply-chain threat for 2023. Also, over 7 out of 10 companies that announced a shift of their manufacturing locations between 2018-2023 moved operations into Asia. The same report found that 67% of organisations consider meeting customer expectations for faster delivery as a critical force influencing supply chain structure and flow.
As re-globalisation develops, certain regions are emerging as competitive hubs for manufacturing and technology. For instance, Latin America, Israel, the Middle East, and Southeast Asia are witnessing significant growth and becoming attractive business destinations. These regions offer new opportunities for companies seeking cost-effective production and expanding customer bases.
Companies must establish a robust financial infrastructure with global coverage to capitalise on these opportunities in emerging markets and remain agile and competitive while navigating the global economic downturn. Indeed, re-globalisation is transforming the global business landscape, emphasising the need for agile and adaptive strategies. As the world becomes more interconnected, businesses need to be able to make and receive payments in a variety of currencies. This point is especially true for companies that are operating in multiple markets.
What is an adaptive payments infrastructure?
The underpinning of secure and reliable payment infrastructure enables seamless cross-border transactions, facilitates currency conversion, and supports efficient cash management.
Traditional payment infrastructure will likely hinder progress and present problems in an increasingly digitalised world, such as limited currency and country options, high transaction costs and lengthy processing times. Further, old payment methods – including wire transfers and cheques – tend to be slow and expensive. They can also be difficult to use in some countries.
On the other hand, adaptive payment infrastructures:
support a high volume of currencies and countries
provide a consolidated view of global cash flows and company liquidity
enable businesses to access cost-effective local payment rails
are built API-first to accommodate direct software integration and programmatic automation
By boosting agility through the adoption of an adaptive global payments infrastructure, businesses can overcome the challenges of re-globalisation, streamline processes, and seize the opportunities it presents.
Moreover, partnering with a global payments provider that can offer businesses a range of services – including consolidated treasury management, currency conversion, transaction processing, and fraud prevention – frees up leaders and their teams to focus on quickly remapping their world rather than fretting about costly, ineffective and outdated payment infrastructure.
Organisations have to embrace payment solutions like Airwallex to future-proof operations and leverage emerging markets. By doing so, they can solve the challenges of global transactions, tap into cost-effective manufacturing locations, and meet customer expectations for speedy delivery.
Re-globalisation is here to stay
Ultimately, as the world continues to evolve and economic power re-balances, businesses prioritising adaptive global payments will be better positioned to seize opportunities, enhance their competitive advantage, and thrive. With a trusted global payments partner, progressive businesses will evolve operations and reposition themselves for success in an increasingly dynamic and interconnected global marketplace.
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David manages the content for Airwallex. He specialises in content that helps EMEA businesses navigate global and local payments and banking.
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