X-Border Payments conflict of connected trips

The grand reopening is upon us: travel is booming, airports are crowded and railroads are crowded. Cross-border travel is seeing rapid response.

Students are returning to school in person, blurring the boundaries of virtual classrooms, and international students are moving into dorms and bursaries.

Booking.com SVP Daniel Marovitz, Leap Finance founder Arnav Kumar and Cashfree Payments co-founder Reju Datta told PYMNTS’ Karen Webster that India illuminates payment controversies for everyone as consumers physically move across its borders.

As e-commerce continues to grow at all heights in that country, companies face the challenge of mixing payments to increase transactions and capture more consumer spending. Simply put, the most “popular” payment methods are not the ones that consumers can use outside of their home country.

Travel presents a microcosm of challenges and opportunities. According to Marovitz, India was the third largest source country for international travel before Covid.

“Travel is a basic instinct,” he said. “And India is waking up to that,” which in turn is increasing online bookings — which brings its own complexities. Over the years there has been a wide difference between the way travel was planned and paid for, the process often involving travel agents.

Today, consumers are booking their trips online or through travel apps. On the road, when visiting restaurants and car rental destinations, these consumers want their payment experience to be consistent. Many of the financial disputes that still exist for international travel revolve around making transactions and dealing with cancellations and refunds.

“Call it the connected journey,” says Marovitz, as travel can be simplified into a series of tabs within an app. The process itself is flexible enough that it’s easier than ever to convert currencies, time zones and FX rates in a streamlined, intuitive way.

Data notes that local payment methods can eliminate some FX pain points and save on cross-border payments.

Monetization sets the stage.

The stage is set for modern payment methods to take root in India, Marovitz said, adding that demonetisation was implemented six years ago under Prime Minister Narendra Modi. That has helped with the use of digital payments and cards, but the market is a bit fragmented as there are only one billion debit cards and about 60 million credit cards in the country.

The RuPay card payment network has become very important to consumers, and its domestic dominance is being penetrated abroad. Merchants who simply look at the most popular of payment methods are missing out on new revenue generating activities.

Related: Low-code ‘Legos’ help Indian companies cross-border payments

According to Cashfree’s Datta, although cards may have been the most prevalent online payment method a few years ago, in recent years UPI has emerged as a preferred and real-time payment option, driving transaction volumes higher than debit and credit cards. Combined.

“Payments can be more efficient than they could be,” he said, noting the streamlined fast and instant bank-to-bank transfers. That speed can be an enticement for businesses operating outside India and looking to enter the market, or for companies based in India who want to serve Indian consumers on the go.

There has been at least some movement by India’s central bank to help improve money flows, as it introduced a free money transfer system that allows individuals to send up to $250,000 in a year for education, travel or gifts.

Providers are faced with the task of improving the speed of cash flow and reconciling fund flows. Data says those improvements can be accomplished through low-code or no-code solutions and application programming interfaces (APIs) offered by Cashfree.

“The value proposition we are bringing is to enable local payment systems,” he said. Advanced technologies can be used to provide documents such as letters and passports accompanying payments and to check spending levels against that $250,000 limit.

Payment aggregators are increasingly important as enterprises need to connect and integrate with banks on a market-to-market basis, he said. Enabling the acceptance of local payments for cross-border transactions could be a major hurdle, Datta added.

Aggregators like Cashfree can help reduce the cost of transactions significantly, save up to 60% on FX rates and split travel-related fees to ensure the correct amount is deposited into the correct bank account.

THe students

The number of Indian students traveling abroad in 2021 is 44 percent higher than in previous years, and the country is set to surpass China in sending the largest number of international students to study in different parts of the world. ).

Kumar said, “Indian students are motivated to have global careers and global education. Tuition will be a challenge as many Indian families have difficulty accessing various financial products in those new countries.

watch out: Facilitate cashless Indian university payments abroad with EasyTransfer

Platforms like Leap help consumers start new financial journeys in those host countries by underwriting the loan and helping borrowers meet documentation and regulatory requirements (such as visas) to send capital out of India.

The company provides students with credit cards that can be used for various payments to start building credit from day one in their new country of study. Expenses can be made directly to the institution instead of going into the student’s account and paying the school later.

As we can generate the loan in different destination currencies, we have been able to significantly reduce the cost of capital,” he said. He said.

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