“Stuck in the stone age”: What CFOs say about the state of international payments

Over the past decade — and particularly in the last few years — there’s been a remarkable surge in the pace of technological advancements. AI is the obvious one, and it seems like new advances are coming hourly. But it’s much more than that: in space exploration, we now have reusable rockets and are literally flying to asteroids, grabbing material, and returning to earth.

In healthcare, mRNA innovations let life-saving vaccines come into production in months instead of years. In genetics, CRISPR allows scientists to edit genes with a precision once thought impossible. EVs are now a common sight on roads. Solar is just exploding. 

But amidst this whirlwind of progress, one sector seems curiously left behind: International business payments, a vital cog in the global economy. 

The contrast is stark. As we push the boundaries of what’s possible in so many fields, the mechanisms for global financial transactions appear to be stuck in the stone age.

Stampli recently convened an online focus group of CFOs and VPs of Finance to get their thoughts on the state of international payments. While the reactions of the participants were uniformly frustrated and dissatisfied, their comments were oriented around five clear themes.

(Good news! Stampli recently launched a solution to the international payments problem to address these specific challenges. More on that below.)

Frustration #1: Disconnected systems 

There usually isn’t any integration between external bank portals and ERPs. This means you need to log into separate systems every time you want to send money across borders. The absence of integration complicates transactions, but it also makes room for errors, inefficiencies, and a lack of real-time data syncing.

From Anil: “International payments are a pain and not streamlined. There is lack of integration with ERP. Even though there are several payment options, most transactions are handled using Wires that have to be set up on the bank side. Currently a major portion of international payment process is manual. It is so cumbersome that no one is reviewing FX rates. The reconciliations are very manual and a waste of human resources.”

From Antonio: “INEFFICIENT! A complete waste of time when there are better, single sign-on options that allow for a more connected experience.”

Frustration #2: Chasing vendors

Want to pay a vendor across borders? You can look forward to spending time hunting for their bank information and the myriad of country-specific documents you need. So much time is wasted on back-and-forths to get this info, especially when every country seems to have its own unique requirements. This significantly extends the payment processing time, hampers business agility and potentially strains vendor relationships.

From Monica: “The biggest problem encountered by our organization with respect to international payments is vendor frustrations. There is far too much back and forth as opposed to the simplicity of dealing with domestic vendors. The whole process needs to be simplified.”

From Jason: “Whether it’s stuck in the dark ages or is just a pain due to regulation and lack of cooperation across the globe, it is a headache and nightmare.”

Frustration #3: FX rate blind spots

The phrase “clear as mud” could very well have been invented for international payments. There’s a huge lack of transparency into the foreign exchange rates. Do you actually know the rate you’re paying? It’s not easy to find out. This lack of transparency undermines your ability to accurately forecast costs, manage budgets, and ensure financial compliance. It also erodes trust in the system, which is why exchanging currency feels more like gambling than solving a real business process.

From Doug: “Information gaps is the key for us.”

From David: “Any time we have to work with an out of country vendor with other currency, it is always a challenge as you are paying a literal moving target.”

Frustration #4: FX rate anxiety

The mirror image of FX rate blind spots is FX anxiety — the anxiety correlated with constantly hunting for the best exchange rates, and always feeling like you missed it. The constant change of foreign exchange markets, coupled with the lack of transparency, creates a scenario where treasurers always think they made the wrong decision.

From Carol: “International Payments are confusing and normally have a lot of hidden fees.”

From Jeremy: “I dislike that most banks have an international fee they tack on to purchases made internationally. Current solutions are stuck in the stone age.”

Frustration #5: Information gaps

If there’s one thing more frustrating than switching between systems to view vendor information, purchase details and other data, our CFO panel has not seen it. With data distributed across systems, it takes way too long to process payments, hinders effective cash flow management and really makes it hard to build a good audit trail.

From Lawrence: “Cross-border payments are often fraught with time delays, hidden fees, and bounce backs. … a labyrinth and complete mess to deal with.”

The end of global payments’ great stagnation?

The frustrations voiced by our focus group underscore the pressing need for more streamlined, transparent, and efficient international payments. Of course, we wouldn’t be bringing this up if we didn’t have a solution: We designed the new international payments capability of Stampli Direct Pay specifically around the challenges our focus group articulated.

In fact, we shared the details of our new solution with the same focus group. And here’s what they had to say…