Video: 10 Minute IT Jams - An update from Corpay

The world of cross-border payments is rapidly evolving. At the heart of this change is the increasing need for robust multi-currency solutions as businesses grapple with currency volatility, supply chain shocks, and the complexities of global trade. Speaking exclusively to Team In It James, David Britton, Managing Director for APAC at Corpay, outlined how the company is stepping up to meet these challenges with a suite of innovative financial tools.

Corpay, Britton explained, specialises in payment solutions, payment automation, cross-border methodologies and commercial cards. "There's effectively two main streams that Corpay provides our corporate clients," he said. "Firstly, we're a foreign exchange hedging company. We allow our customers to protect their bottom lines, so that their profit margins or their revenue are shielded from movements in the Australian dollar against foreign currencies."

Recent events in the UK and global financial headwinds, Britton noted, have fuelled currency volatility, putting pressure on Australian businesses. "You would have seen recent moves being quite volatile with the situation that's effectively being driven out of the UK with their financial crisis happening, and that's affected the Australian dollar," he explained. To combat this, Corpay works proactively with clients to put mitigation strategies in place to prevent losses caused by currency swings.

On top of these hedging solutions, Britton highlighted Corpay's second main focus: payment technologies. "We use a whole suite of payment technologies to allow our customers to have more efficient means of making cross-border payments. That might be as simple as a file upload or as technical as a full API integration of our systems into our client systems," he said.

But Corpay is not resting on its laurels. The company has been investing heavily in improvements and new technologies. "There's been a long migration of clients from offline dealing, where they'd be talking to a corporate dealer over the telephone, migrating to online systems," Britton said. Their online systems now support buying and selling in 130 different currencies. Major innovations on the horizon include advanced tools to streamline cross-border transfers.

One such tool is the SWIFT GPI tracker, which is set to transform the transparency of international payments. Britton described the difficulties with traditional methods: "Payments just when you do a payment cross-border, it typically doesn't go from your bank account to the receiving party's bank account. It goes via a series of correspondent banks and sometimes the correspondent bank might be a little bit slow." With the SWIFT GPI tracker, Britton said, "It allows our Corpay clients to see exactly where a payment might be held up… We used to have to send messages to banks and it could take a couple of days to come back, but now we can instantly go in and have a look and see where a client's payment is."

Another imminent launch is Corpay's introduction of virtual IBAN accounts. This means Australian exporters will have "a bank account number for their foreign currency receipts," Britton explained. "We're launching a virtual IBAN account where everyone will have their own effectively bank account number, and it allows us to quickly identify who the funds are from and who they're going to." Scheduled for release later this year or early next year, this feature aims to make international trade both smoother and more secure for Australian exporters, who are often paid in foreign currencies.

Britton also pointed to Corpay's new intercompany netting tool, tailored to multinational corporations. "We find a lot of multinational companies… have payments between their departments – the Swedish department might have to pay the Brazil department and the Kiwi one might have to pay the Singapore, etc. For a big multinational company there might be thousands and thousands of these payments between all the divisions," he said. Traditionally, this month-end process could take days; Corpay's tool, integrated with clients' ERP systems, crunches the numbers in minutes, greatly increasing productivity. "It's a really exciting time for Corpay cross-border and our technology offering," Britton enthused.

Amidst all this growth lies an unwavering focus on customer needs. "It's really important that we do that at the moment," Britton said, referencing the current wild swings in the Australian dollar, which has dropped from the mid-70s to under 64 US cents. "It's really important for our clients at the moment to look at where their exposures are and to protect their costs."

Turning to the wider Asia-Pacific market, Britton identified two key challenges: currency volatility and supply chain disruptions. "We're a risk currency so when things get risky in the world and people get a little bit scared, they tend to sell the Australian dollar," Britton noted. He added that Australia's economic fundamentals remain sound, but the dependence on imported goods means that currency depreciation quickly shows up in domestic inflation – and squeezes corporate margins. "Having conversations about protecting budgeted rates… and how you can cover that through forward contracts or FX derivatives, that's an important thing."

Supply chains, battered by the pandemic, are just now beginning to untangle. "Shipping containers effectively ran out and the price of shipping went through the roof, so that's been a really big one for importers and exporters to manage over the past 12 to 24 months," Britton said. "Fortunately… the price of those shipping containers is now moderating and things are starting to free up."

Asked why businesses should invest in multi-currency capabilities and a strong FX partner, Britton emphasised the firm's expertise and breadth. "We only employ the best of the best dealers," he said. "We have people that can talk to your customers about protecting their bottom line, not just about getting the best rate." He stressed that Corpay can handle a wide range of exotic currencies and facilitate payments in major markets like China using not only US dollars, but also the offshore renminbi. "We believe that we've got the broadest range of currencies that we deal with of any broker in the marketplace, so if you are paying in exotic currencies, it's worthwhile talking to us."

Ultimately, in a world where markets turn on a dime and supply chains can jam up overnight, Britton was clear-eyed about the need for agility and forward-thinking partnerships. As he concluded, "That's what we're really focused on at Corpay at the moment."