November 2023 Summaries

Merchant acquirers are licensed financial institutions or payment providers that enable merchants to accept card payments, maintain merchant settlement accounts, and assume risks related to fraud, disputes, chargebacks, and merchant insolvency. In a typical card transaction, payment data moves from a gateway or point-of-sale terminal through a processor and acquirer to the card network and issuing bank, which approves or declines the payment before funds are ultimately settled to the merchant. Acquirers differ from payment processors, which primarily transmit and verify transaction data, although some providers combine both functions to simplify merchant onboarding and operations. Acquirers also help manage refunds and chargebacks, while merchants can limit disputes and fraud through pre-chargeback programs, 3D Secure authentication, and network tokenization. Businesses expanding internationally should consider an acquirer’s licensing, regional payment infrastructure, multicurrency settlement, and foreign-exchange capabilities; Airwallex promotes its combined acquiring, processing, FX, transfer, fraud-prevention, and global payout services as a solution for such merchants.

Foreign exchange costs and currency volatility can materially affect international businesses through cross-border customer payments, supplier purchases, employee wages, financial reporting, and product competitiveness. Exchange rates are influenced by inflation, interest rates, economic performance, political stability, and trade balances, making active monitoring and risk management important for protecting profit margins. The piece recommends reducing unnecessary conversions by holding and spending funds in multiple currencies, using hedging or forward contracts to manage volatility, and choosing providers with transparent conversion pricing. It presents Airwallex as a platform offering multi-currency Global Accounts, interbank FX rates, and tools to lock in exchange rates for individual transactions or up to 180 days across selected currency pairs, while noting that the information is not financial, legal, tax, or investment advice.

International transfer speeds depend on factors including direct banking relationships, intermediary banks, operating hours and time zones, regulatory checks, geopolitical disruptions, and the currencies and countries involved, with major currency corridors generally benefiting from more established infrastructure. Banks commonly use the SWIFT network for cross-border payments, which can take up to five days and involve transaction and foreign-exchange fees, while regional networks such as SEPA, ACH, CHAPS, BACS, and Hong Kong’s FPS can offer faster domestic or regional processing. Fintech and peer-to-peer platforms may provide near-instant transfers in some circumstances, although funding methods, fees, and currency-conversion costs can affect timing and expense. Fast, reliable international payments are important for businesses to manage suppliers, payroll, emergencies, and cash flow, and Airwallex promotes its use of local payment rails to provide same-day, instant, and faster transfers across a range of global markets.

Interchange fees are charges paid by merchants through their payment acquirers to cardholders’ issuing banks whenever card transactions occur, covering payment authorization, fraud risk, bad debts, and processing costs. Alongside acquirer markups and card-scheme fees, they form the merchant discount rate and are estimated to account for 70–90% of card-processing costs. Rates, generally structured as a fixed amount plus a percentage of a transaction, are established and periodically adjusted by networks such as Visa and Mastercard and vary based on card type, network, transaction method, commercial versus consumer use, domestic or cross-border status, and merchant category. Card-not-present transactions, such as online purchases, typically carry higher rates because of increased fraud and chargeback risks, while in-person payments are usually less costly. Businesses can manage these costs by comparing processors, negotiating where transaction volumes permit, settling promptly, providing complete transaction data, reviewing statements, and choosing between transparent Interchange++ pricing or simpler blended-rate pricing. Regulation varies internationally but increasingly emphasizes fee transparency, competition, consumer protection, and limits on interchange charges.

Airwallex has introduced Bill Pay, an accounts payable solution designed to centralize invoice upload, approval, payment, and reconciliation workflows for domestic and international bills. The company positions the product as a response to fragmented tools, manual data entry, spreadsheet-based tracking, and the added complexity of paying overseas vendors. Bill Pay uses AI and OCR to extract invoice details, supports duplicate-invoice and payment-detail checks, and offers configurable multi-level approvals, audit trails, mobile approvals, and comments. It integrates with Xero, with NetSuite and QuickBooks integrations planned, to synchronize invoice, approval, and payment data and accelerate reconciliation. Airwallex also supports payments to more than 150 countries in over 46 currencies, including instant payouts in more than 60 countries, while allowing businesses to hold and pay in multiple currencies and access its foreign-exchange rates when conversion is needed.

Foreign transaction fees are charges, typically totaling 1% to 3% of a purchase, applied when card payments involve foreign banks or currency conversion, often consisting of a card-network conversion fee of about 1% and an issuer fee of about 2%. These costs can arise from international supplier payments, travel expenses, overseas purchases, advertising, and customer refunds, and can accumulate substantially for businesses with frequent cross-border activity, alongside possible FX markups and transfer delays. Strategies to reduce costs include choosing cards without foreign transaction fees, paying in the local currency rather than accepting dynamic currency conversion, and using multi-currency accounts or fintech payment services; however, cash conversion may involve unfavorable exchange rates and inconvenience. The material highlights Airwallex’s multi-currency account and Borderless Card as examples of products intended to help businesses hold, receive, and spend foreign currencies while reducing conversion-related charges.

Interchange fees are card-network-set charges paid by merchant acquirers to card issuers and ultimately passed to merchants, alongside separate processing and network fees. Rates vary by card type, transaction risk, merchant industry, and country, with credit cards generally costing more than debit cards because they involve borrowed funds and greater repayment risk. Examples include average US Visa credit-card interchange of 1.91% and typical US debit rates near 0.5%, while regulatory caps in Europe, China, and Australia limit rates to differing levels. Merchants can manage these costs by selecting competitive acquirers and processors, strengthening fraud prevention through measures such as tokenization, encryption, authentication, and PCI DSS compliance, and using multi-currency settlement to avoid foreign-exchange costs on international payments. The content promotes Airwallex as a global provider that combines acquiring, processing, gateway services, multi-currency payments, and security features, while noting that the information is not professional legal, tax, regulatory, or investment advice.

Corporate cards can streamline employee spending, reduce reimbursement delays, improve approval controls, and automate reconciliation, but businesses should first assess their expense volumes, operational pain points, growth plans, and international payment needs. Available options include credit, debit, prepaid, virtual, employee, company, and multi-currency cards, each offering different trade-offs involving financing, budgeting, security, procurement, and overseas transactions. When evaluating providers, companies should compare annual, foreign-exchange, international transaction, and late-payment fees; assess expense-management features such as real-time tracking, approval workflows, receipt capture, and accounting integrations; and consider virtual-card controls, fraud and purchase protections, customer support, and merchant acceptance. Businesses should also select a program that can scale with future growth and cross-border operations. Airwallex is presented as a provider of physical and virtual multi-currency debit cards with integrated expense management and an emphasis on reducing international payment fees and manual administrative work.

Airwallex announced Yield for eligible Australian customers with at least A$500,000 or equivalent in USD, offering returns on AUD and, for the first time, USD balances through investments in J.P. Morgan low-risk money market funds, with no lock-up period or withdrawal penalties; broader Australian availability is planned for early next year and additional markets in 2024. Product updates include iOS bill-payment approvals through Bill Pay, more detailed merchant reports showing transaction fees and expected settlement dates, payment authorization holds with capture available up to 30 days later for Visa, Mastercard, and Klarna, and faster international transfers, including 24/7 Hong Kong FPS payouts. Airwallex is also beta onboarding US customers for an online payments product that will support cards, Apple Pay, Klarna, local payment methods, multicurrency settlement, e-commerce plugins, API integrations, payment links, and QR codes. The company notes that Yield involves investment risk and is not personal financial, legal, tax, or investment advice.

Merchant acquirers and payment processors perform complementary but distinct functions in card payments: acquirers are card-scheme-licensed financial institutions that onboard merchants, maintain merchant accounts, settle funds, and assume much of the risk related to fraud, disputes, and chargebacks, while processors securely transmit transaction information for authorization among merchants, acquirers, card networks, and issuing banks. Both use measures such as encryption, tokenisation, PCI DSS compliance, and fraud monitoring, though acquirers focus more on merchant-level risk assessment and regulatory obligations including AML and KYC, whereas processors concentrate on technical transaction handling and error management. Although smaller merchants commonly access processors through acquirers, some larger businesses may work directly with processors. Airwallex presents itself as a provider of both services internationally, offering multicurrency payment collection and settlements, global payouts, and an example of helping retailer Orbitkey expand in Europe, accelerate payments, and reduce international transfer costs.

A well-designed company expense policy can control costs while supporting employee satisfaction by clearly defining reimbursable categories, spending limits, acceptable travel and accommodation standards, documentation requirements, approval processes, reimbursement timelines, and rules for international transactions. The policy should apply fairly across the organization, address tax and legal compliance, establish consequences for noncompliance, allow transparent exceptions where appropriate, and be widely accessible and regularly updated as business needs change. Expense management technology can reduce manual administrative work, provide real-time spending oversight, automate approvals and reconciliation, and make submitting expenses easier for employees. Airwallex is presented as a platform offering multi-currency corporate and employee cards, configurable spending controls, receipt capture, approval workflows, mobile submissions, foreign-exchange functionality, and accounting integrations for businesses managing expenses across entities.

Payment acquirers, or acquiring banks, enable businesses to accept electronic payments by authorising card transactions, settling funds into merchant accounts, and managing risks such as fraud, disputes, and chargebacks. Their processing fees, also called merchant service or acquiring fees, generally combine a percentage of each transaction with fixed charges and vary according to factors including industry risk, card and payment type, customer location, and whether sales occur online or in person. Acquirers differ from payment processors, which supply technical processing infrastructure, because acquirers maintain merchant accounts and coordinate with card networks and issuing banks to complete settlement. Businesses can reduce costs through regular fee audits, comparing and negotiating provider offers, leveraging transaction volume, considering bundled services or fixed-fee arrangements, and periodically reviewing rates. Airwallex positions its global acquiring and payment services as a way for companies to manage multicurrency settlements and potentially reduce foreign-exchange costs, while noting that the information is not professional legal, tax, regulatory, or investment advice.

As online retail has grown, particularly following the pandemic-driven surge in 2020, businesses increasingly depend on effective electronic payment systems to support sales, conversions, and customer experience. Payment acquirers, also known as merchant acquirers, are financial institutions that enable businesses to accept cards, digital wallets, and other payment methods, securely process transactions, manage regulatory obligations, and settle customer funds into merchant accounts. They facilitate communication among merchants, payment gateways, card networks, and card issuers, while providing infrastructure for security, fraud monitoring, PCI DSS compliance, and chargeback risk management. Selecting an acquirer involves considering authorisation rates, supported payment methods and local options, international capabilities, integration options, compliance support, and fees such as transaction, interchange, gateway, service, chargeback, and cross-border charges. Newer fintech providers such as Airwallex position themselves alongside established acquirers by combining acquiring, payment processing, global accounts, multi-currency settlement, fraud tools, and integrations with ecommerce and accounting platforms.

Seasonal sales events such as Black Friday, Cyber Monday, and Christmas can substantially increase revenue but also expose businesses to payment failures, fraud, customer frustration, and lost sales if systems are not prepared. Selecting a scalable payment acquirer is presented as central to handling increased transaction volumes, supporting geographic expansion, and connecting merchants with customer banks and card networks. Businesses are encouraged to plan early by forecasting demand, stress-testing payment infrastructure, reviewing authorization and fraud data, ensuring mobile-compatible checkout, and preparing support resources. Reducing checkout friction through locally preferred payment methods, digital wallets, and buy-now-pay-later options can help limit cart abandonment, while security measures must balance fraud prevention, regulatory compliance, and the avoidance of false declines. The passage also emphasizes controlling payment-related costs, including foreign exchange and cross-border fees, and describes Airwallex’s global acquiring platform as a service that supports payments across countries and methods, multicurrency settlement, international payouts, and foreign exchange management.