Paymenex Blog and Highlights
Payments-as-a-Service (PaaS) is becoming increasingly popular in some countries, particularly in the United States, Canada, most parts of Europe, and in the Asia region. It's projected that it will become more mainstream in 2030.
Payments-as-a-Service (PaaS) Industry Trends
Based on the GlobalView Research report, the PaaS market size valued at US$ 13.88 billion in 2022. The market is projected to increase at a compound annual growth rate (CAGR) of 15.2% from 2023 to 2030.
Advances in technology and the growing demand for digital payment methods are major driving forces of PaaS in the global market. COVID-19 has also intensified the behaviour of both consumers and businesses in paying for their goods and services.
With PaaS, companies have a number of options to process payments on their transactions. Financial institutions can use this system to make their customers' lives easier when paying bills or making other payments with merchants. But how important is PaaS in financial technology organisations?
The Importance of PaaS in your Fintech Company
Payment-as-a-service solutions are designed to provide a more personalised customer experience by enabling financial institutions to customise and configure their services to meet the needs of their customers.
As more and more people are getting comfortable with digital payments, companies are now building new payment-as-a-service (PaaS) solutions to help them spend their money more smartly. Next, we’ll discuss why PaaS is important for your financial institution:
1. Helps Your Fintech to be Cost-Effective
Building a payment processing infrastructure from the ground up can be costly and time-consuming. PaaS suppliers provide a cost-effective solution for fintech organisations by granting access to payment processing capabilities without requiring huge upfront investments.
2. Supports Your Global Payments Processing
PaaS providers can enable organisations to handle payments in numerous currencies and across borders, which is especially significant for businesses with global customers.
3. Increased Customer Trust and Confidence
PaaS suppliers frequently feature extensive fraud protection and security measures, which can help organisations create confidence with their consumers while protecting against financial loss.
4. Provides valuable customer data and insights
PaaS providers can provide useful data and insights into consumer payment behaviour, allowing businesses to streamline payment processing and boost customer retention.
5. Keeps Your Business Scalable and Flexible
As fintech companies expand, they must be able to handle the rising transaction volumes. A trusted and professional PaaS third-party provider offers scalability and flexibility for increasing demand for PaaS solutions.
In conclusion, Payments-as-a-Service (PaaS) is a vital component for many organizations, particularly fintech firms, because it provides cost-effective, scalable, and fast payment processing capabilities while allowing businesses to focus on their core goods and services. PaaS providers offer many benefits such as better customer data and insights as well as increased consumer trust.
Our expert PaaS team ensures that your payment platforms are designed with your company's needs in mind, meaning that your payment infrastructure will be simple and easy to use. We'll set up everything from the point of sale to the back-end processing so you don't have to worry about anything at all! For more information, get in touch
Traditional card issuing processes can be complex and time-consuming, resulting in various pain points for both issuers and cardholders. It's common for Fintech companies to encounter traditional card processing issues, which can include longer processing times, a lack of flexibility, higher overhead costs, security risks, and a lot of paperwork. Switching to a CaaS (card as a service) system allows you to improve the way you work.
Card as a service (CaaS) has made it easier for cardholders to switch their credit or debit cards without going through the tedious process of applying and waiting for approval from traditional card providers.
Customers often find more flexible and quicker payment methods. They are also looking for more contactless and touch-free payment options.
A CaaS payments solution provides your cardholders with the option to shift between transactions using both physical and virtual cards. Buy Now Pay Later (BNPL) card payments are another option that customers find to be particularly useful. There is also an emerging trend that non-financial companies to create innovative payment cards from a CaaS model to answer these growing demands.
To meet customers’ expectations, your fintech business should make a switch for the following reasons:
1. Faster to Market on Target Segments
CaaS providers offer a streamlined and automated approach to deploying and managing card issuance infrastructure, thus reducing the time and resources required to launch new programs. This enables businesses to launch new payment card products and services quicker than their competitors.
2. Less Time for Card Issuing and Processing
With reduced processing time and issuing of cards, you can also minimise the overhead cost of building your digital payment infrastructure.
3. Effectively Automate Your Processes
You can virtualise and automate your payment services with extensive card technology. Some merchant processing also provides card readers, devices, and payment gateway solutions to retailers without giving much attention to creating your infrastructure and hiring developers.
4. Improved Card Security and Control
CaaS solution improves the security of card issuance processes by providing advanced encryption and tokenization capabilities, enhanced monitoring, as well as fraud prevention tools.
5. Cost and Spending Control
You can manage your capital expenditures (CapEx) and operating expenditures (OpEx) by using a CaaS model. You can even maintain and upgrade your card issuance infrastructure without having to spend too much. An expert CaaS provider usually offers cost-effective and scalable solutions. This means that CaaS can be launched sooner to reduce additional upfront investments in hardware and software.
6. More Flexible Features
Your company can offer flexible CaaS products by customising your card's features, terms, and conditions. This results in more effective targeting of various customer segments and more tailored payment products and services.
7. Improved Customer Experience
Your business can offer versatile, customised, and innovative payment solutions to customers that can help improve customer satisfaction and loyalty, which boosts your revenue growth.
Banking-as-a-Service (BaaS) is a technology that enables fintech companies to access and integrate banking services without building and maintaining their infrastructure. By leveraging BaaS, fintech companies can quickly launch new products and services, reduce costs, and gain access to advanced payment processing capabilities.
According to a survey, 85% of respondents from global financial institutions believe Banking as a Service (BaaS) will make an impact over the next year. More so, 40% of the respondents believe the impact will be significant in the coming months.
Also, 81% of global respondents revealed that they see BaaS as a means to expand their business, improve their distribution channels, and streamline their overall operations.
Without BaaS, non-bank companies that want to offer financial services to their customers would need to build their banking infrastructure, which can be time-consuming, expensive, and challenging. Next, let’s discuss the benefits of BaaS in the next section.
3 Benefits of Banking as a Service for Your Business
With BaaS, fintech companies can focus on developing innovative products and services instead of worrying about building their banking infrastructure. Aside from this, the benefits of using BaaS can provide many opportunities to grow your fintech business, as follows:
1. Provides New Revenue Sources. The direct and immediate benefit of getting a BaaS platform for your company. It’s a new and great revenue stream opportunity by giving access to API-based banking products and services to non-bank companies and other financial institutions.
2. Enhances Flexibility and Marketability. Fintech businesses have the flexibility to operate their companies because you don’t have to get a banking license. Companies don’t have to create infrastructure from scratch. Your organization also can take advantage of broader market reach in collaboration with different financial institutions.
3. Minimizes Costs and Strengthen Security. Banking as a Service allows your companies to save time and money by eliminating the need for costly infrastructure investments. A reduction in developing your system enables your business to offer cutting-edge and personalized products and services to customers. With a vast array of organizations giving financial services, it’s also essential that all parties ensure high standards for security and trust.
How to Choose the Right BaaS for Your Business Needs
Choosing the right banking-as-a-service (BaaS) for your fintech company is a critical decision that can greatly impact your business. With the right BaaS, you can access a range of banking services such as e-wallet payments, loan origination, and risk management. This allows you to focus on developing innovative products and services that meet customer needs without having to worry about building or managing an internal banking infrastructure.
When it comes to selecting a BaaS, there are several factors to consider, including cost, scalability, efficiency, flexibility, marketability, and security. It’s important to do your research to choose the best option for your business needs.
For more of the cutting-edge BaaS infrastructures that suits your company, email us at [email protected] for a free consultation!
Did you know that about one billion people send and receive money internationally in the world? International money transfers have grown past the $530 billion mark recorded in 2016 and are expected to reach $630 billion by end of 2022. International money transfer services are now more accessible than ever.
Traditionally, sending money has been expensive and arduous with a huge number of middlemen, hidden fees, and massive manual paperwork. Millions of people who send and receive money abroad every year experience these tough situations; especially high costs.
Today, financial institutions are offering more customer-centric solutions. Sending, and receiving money internationally is easier with more competitive fees and better speed of transactions. In a highly competitive sector, companies are under high pressure to offer improved services.
Well, how are financial companies responding to this pressure; setting themselves apart from the rest? This question is best answered by Chukzy that currently has over 20 million users worldwide. It offers a one-stop smart financial solution to sending, and receiving money; requesting, paying, and getting paid.
Chukzy is one of the companies that has done a massive job at setting themselves apart. As described by the innovative team at Chukzy; the solution was aimed at enabling you to use your money anywhere like a local. Individuals and small companies can now enjoy cheaper, faster, and more convenient internal money transfer services.
Borderless financial freedom
If you're a traveller, you must know how great it may feel to not worry about currency exchange in every country you visit. With a Chukzy account, you make payments in your preferred currency. You truly experience borderless freedom in terms of spending your money.
Do you have relatives living, working, or studying abroad? Imagine making instant transactions. Chukzy enables swift international money transfers between two individuals; making it easy to share with family and friends back at home. The distance is not felt!
Who should use Chukzy?
Chukzy takes care of all your financial needs across borders. If you’re looking for an international money transfer service that covers the highest number of countries globally and offers the best prices, Chukzy is definitely a great place. It’s extensive in covering possible needs for international money transfers:
· Save on exchange rates while traveling abroad.
· Send and receive money from your family and friend while working or studying abroad.
· Transfer funds to yourself from foreign accounts for daily uses while living abroad.
· Making payments while abroad; spending like a local
· Receive payments from international clients or make payments to international suppliers
· Make international money transfers remotely without visiting a physical branch; or online transactions.
· Fast sign-up, for a Free account or choose from the packages. The process is simple and fast, no paper work
· Chukzy Visa or MasterCard Debit cards to spend, pay and withdraw money in more than 150 countries
· Smart multicurrency accounts with dual Card functionalities and option to choose how you pay or spend, supporting over 90 currencies.
· Send, Receive and Request Money worldwide is Simple, Fast and Cheap, with Lower fee for large transfers
· Chukzy real-time bill payment.
For many years, people from Africa have crossed borders to study, live, work, and trade. Most of these people do not cut home ties. Instead, the migrant retains relationships with their families and governments, which involves sending and receiving money from home. Students without scholarships may need school fees and upkeep money from their parents in Africa. Employees working abroad may also want to send money home for their families or settle local bills remotely. For whatever legal reason for remittance, cross-border payments remain highly significant to Africans living abroad and their governments, businesses, and families back home.
Considering their global scale, one expects money transfer services such as PayPal and Western Union to meet remittance needs, as interbank transfers may pose many challenges regarding cross-border payments. However, for various reasons, these players fail to meet their expectations.
An estimated 36 million Africans live abroad, with remittance inflows into Sub-Saharan Africa alone amounting to about $47 billion in 2019. Despite the high demand for international money transfers in this region, cross-border remittance in Africa remains the most expensive in the world. Transfer fees cost approximately 8 and 10% of the transaction value, translating to approximately $4.7 billion in transaction expenses. Putting this data into context, Sending $200 to this region costs an average of 8.5% ($17) higher than in other regions. Additionally, such high fees are far from the 3% set by the Sustainable Development Goals (SDG). Such high costs hinder small transfers, contributing mainly to the total inflows.
Slow and delayed remittance
Conventional electronic transfer services such as PayPal are generally quicker than traditional banks. However, they are still slower, considering PayPal payments may take up to 5days processing time, depending on the linked bank account. The delay in fund transfer can be costly to the transacting parties. Think of a person trying to settle their bills or even a citizen trying to pay tax on a deadline day. Fintech firms are challenged with solving these issues by creating a model that supports a faster payment process that can be adopted more broadly across African countries.
The number or the nature of the intermediaries involved in international money transfer prompt African governments to create regulations that hinder the easy transfer of funds. Additionally, each country has its regulations guiding that make cross-border payments slower.
Besides sending and receiving money, people living abroad need other financial services to manage their money. They may want to remotely manage their invoices and utility bills such as water, school fees, hospital bills, government taxes, and even electricity bills. Such services may mean a lot of hustle when dealing with traditional banks. Additionally, conventional electronic payment services such as PayPal may not support most of these services.
Moving to Seamless Cross-border payments with Chukzy
There is an apparent acceleration in demand for comprehensive and efficient cross-border money transfer services as African consumers become more comfortable with digital payment products and services. Chukzy responds to users' needs accurately by enabling instant and affordable cross-border payments. The platform allows users to make payments and send and receive funds from anywhere across the world through smart multi-currency accounts. People can now transact in local currencies as the platform supports more than 70 currencies. Additionally, Chukzy enables users to manage cross-border invoices and bills. Africans living and working abroad can now automate and settle their electricity bills, school fees, water bills, invoices, port charges, and government taxes in the comfort of their homes. The platform also has an intuitive user interface, making it suitable for even less experienced users.
Many Western migrants travel to Africa for various reasons. From tourists embarking on wildlife and stunning geographical sceneries to business travellers to workers, more than one million Europeans move to the second largest continent annually.
The degree to which immigrants access financial services has significant implications for achieving their objectives in the foreign land. While away from home, these migrants need proper access to finance to facilitate their activities in Africa and even back home. For example, as a tourist, you will need to make payments for travel tickets, accommodation, food, tour guide services, and any other bill that your activities attract while adventuring Africa. Additionally, you may want to settle bills back home. Business travellers also need remittance services to facilitate their activities and stay in Africa.
Local Fintech Products are not deal with European Migrants
Despite their dire need for access to financial services, western migrants to Africa are less likely to use a wide range of financial services compared to their native counterparts. Factors such as language barriers, cultural differences, and lack of experience with the services of the local financial institutions hinder migrants' access to financial services in Africa. For instance, M-Pesa is the leading mobile money service in Africa. M-Pesa is the leading digital payment method in Kenya that allows users to transfer money and pay for goods and services anytime, anywhere. However, the service offered by telco company Vodafone and Safaricom requires users to have an active registered mobile only works when one has a registered Safaricom SIM card. It works well for the natives considering that Safaricom is the dominant mobile network provider, meaning most mobile users have a Safaricom line. However, foreigners may not enjoy M-Pesa services because many of them may not have the local network provider's SIM card. This case is especially true for tourists who only visit the country for a few days and do not see the need to register for an M-Pesa SIM card.
Additionally, M-Pesa is only available in a few countries, majorly African countries. Therefore, many tourists do not register for mobile phone-based financial services since they cannot use them once they return to their countries. Instead, these foreigners would still stick to using bank cards and other international digital payment services, which may not be as convenient as local digital payment options.
A solution in Interoperable Fintech Products and Services
Mobile payment solutions remain the best approach to solving the lack of access to adequate financial services by travellers and migrants in Africa. Mobile devices are already part of travellers and migrants' lives as they carry them all the time.
There has been significant growth in mobile payment services. However, these services are primarily bound by an individual country market, hence not ideal for travellers and migrants. Therefore, all-inclusive mobile-payment services that support various currencies and multiple financial accounts are needed to resolve this complexity. This is where Chukzy Solutions comes in.
Chukzy financial services for Anyone, Anywhere, Anytime
Chukzy is a mobile app that allows users to access financial services anytime, anywhere hence solving the interoperability problem with most Fintech products and services. Western migrants to Africa no longer need to use Swift or Banks to facilitate payments while away from home. The app allows users to send, receive, hold and exchange money in over 70 currencies, or make payments to anywhere as a local. Additionally, it enables users to connect and manage their global finance on one platform. They can receive, keep, exchange, and transfer funds in various currencies. Chukzy also makes cross-border payments more accessible, faster, and cheaper, creating a perfect solution for migrants who manage their finances in Africa and Europe all in one platform.