Currency volatility complicates cross-border transfers, but digital multi-currency wallets provide a solution.
According to Ola Oyetayo, CEO of B2B cross-border FX and payments enabler Verto, several of their customers are concerned about how the “macro” will impact them in the next six to twelve months, taking into account the Russia-Ukraine geopolitical crisis, COVID-related supply chain constraints, and significant political events in the firm’s primary market, the United Kingdom.
“If you’re a UK firm that has to trade internationally, your pound revenue isn’t what it used to be six months ago,” Oyetayo explained in an interview, adding that rumors of a potential recession and how long it would continue have muddled matters further.
Interest rates have fallen to multi-year lows in most markets, and debt will now be more costly in the future, which is another concern on company owners’ minds as they re-calibrate their expectations for their capital structure, working capital, and business expenditures.
Furthermore, because four of the five worst-performing currencies against the US dollar this year have been African currencies, servicing emerging markets in Africa — one of the most expensive corridors to send money to in the world — has been particularly difficult for foreign businesses, according to Oyetayo.
As a result of the significant currency volatility, he claims that a growing number of clients are wary of conducting transactions in these markets – a problem that Verto is addressing by educating customers on how to handle the macroeconomic instability.
