The volatility of foreign exchange (FX) complicates cross-border payments, but there is a solution in the shape of digital multi-currency wallets.
According to Ola Oyetayo, CEO of B2B cross-border FX and payments enabler Verto, a number of their clients are concerned about how the “macro” will affect them over the next six to twelve months, taking into account the geopolitical crisis involving Russia and Ukraine, COVID-related supply chain issues, and significant political events in the company’s main market, the United Kingdom.
In an interview, Oyetayo stated that rumors of an impending recession and how long it would continue have further complicated matters. “If you’re a U.K. firm that has to trade internationally, suddenly your pound revenue isn’t what it used to be six months ago,” he added.
Another concern on the minds of business owners as they reevaluate their expectations for what their capital structure, working capital, and business expenses would look like going forward is the fact that interest rates have fallen to multi-year lows across most markets and that debt will now be more expensive going forward.
Additionally, Oyetayo noted that foreign companies have found it difficult to service emerging markets in Africa, one of the most expensive regions in the world to send money to. This is because four of the top five worst-performing currencies against the dollar this year have been African currencies.
He said that because of the significant currency volatility, more and more consumers are becoming extremely careful while transacting in these markets. In response to this worry, Verto is training clients on how to deal with macroeconomic unrest.