Handling Multiple Currencies

Digital wallets (DWs) are the number 1 and fastest growing payment method globally. Yet not all DWs are the same. This is an analysis of the different players and business models behind them. These are 3 reasons why you should pay attention to DWs: —  5.2 bn users globally by 2026 —  50% e-com global share ($3.1 tn) —  30% POS global share ($10.8 tn) To understand how DWs differ (#strategy, positioning) we need to categorize them. These are my criteria: 1)  The types of players that are behind them: SuperApps, BigTechs, e-commerce players, banks, crypto providers, telecoms, big brands, etc. 2)  How they manage funds: DWs such as Apple or Google Pay (pass-through) don’t have their own balance, others such as PayPal process funding and #payments in separate stages, whereas Alipay and WeChat Pay are stored wallets, pre-loaded with funds. 3)  The kind of use cases they support (online or in-store with P2P, C2B, B2C, B2B, C2G and G2C variations). 4)  Their #technology: QR-codes (widespread in Asia) vs NFC (popular in Europe) or crypto wallets are examples. 5)  Their target audience: merchants, marketplaces, big brands, niche users, etc. 6)  The payment methods they support: credit or debit cards, bank accounts (A2A transfers), crypto, etc. Based on the above, I have identified 10 distinctive DW plays: 1. SuperApps in Asia that have evolved from simple wallets facilitating payment use cases to huge ecosystem behemoths with multiple plays (consumer, merchant, government, lending, etc).   2. Bigtechs like Apple and Google using DWs as vehicles to monetize their user base and expand beyond their core offering. 3. #ecommerce platforms like Amazon, Mercado Pago or Rakuten looking to boost their business and create new growth opportunities. 4. Ecosystem players in local or regional markets that use DWs to bring payments, digital platforms and mobile banking functionalities under one umbrella. 5. Banks looking to compete with new value-chain challengers (fintechs, platforms) on their own (front-end) customer-facing game. 6. A2A players like Venmo or Zelle focusing on social features, P2P payments, instant transfers, bank integration and competitive pricing to expand their offering. 7. Niche players using customization, vertical focus, rewards and loyalty programs and specialized offerings to service specific use cases (i.e. gambling, gaming, FX). 8. Crypto & blockchain players using DWs to bridge the gap with the fiat world and to offer new use cases. 9. Big brands like Starbucks leveraging DWs to build closed-loop FS ecosystems. 10. Telecoms in Africa employing DWs as a replacement for core-banking infrastructure.   DWs’ spectacular rise is not only democratizing access to #payments and to broader FS faster than any other point in history but it is also forcing players across the value chain (providers, merchants, banks, platforms, fintechs) to re-think their entire positioning and strategy. Opinions and graphics: Panagiotis Kriaris

#Africa bleeds $5B a year not to #corruption or #mismanagement, but just to move money within its own borders. Example: A Kenyan business paying a Ugandan supplier. Instead of Nairobi → Kampala, money goes: Nairobi → USD conversion (1–2%). USD routed via New York/London ($20–50 fee). USD → Ugandan shillings (another 1–2%). By the time a $26,000 invoice is paid, $500–1,000 is gone. Whilst we may be denied visas, our money travels freely through New York. And it’s not just trade: Africa’s #diaspora sends $95B home each year, yet pays the world’s highest remittance costs. -We pay the highest cost for credit. -We pay the highest cost for payments. -We pay the highest cost to send our own money home. It’s not inefficiency. It’s design. The #GlobalFinancialSystem wasn’t built for us. The good news? Solutions exist. #PAPSS (Pan-African Payment and Settlement System) is already live linking 15 central banks, 150 commercial banks, and 14 payment switches, with the capacity to handle $300B in intra-African trade annually. Through PAPSS, that same Kenya–Uganda  transaction could  look very different: -One direct conversion from KES → UGX (0.2–0.5% spread). -Settlement netted via African central banks. -Funds received in hours, not days. Estimated cost: $60–150.  Potential savings: $500–950 on a single $26,000 payment. No detours. Value stays in Africa. The challenge isn’t invention. It’s implementation. One Africa. One market. One #payment system. AI image below*

I Did a Little Research and Found Something Fascinating in FMCG Pricing Across Borders (IND VS PAK) Recently, I came across an insightful comment on my post regarding SKU pricing strategies in FMCG. It led me to do a quick comparison between India and Pakistan, and the findings were quite interesting. Let’s break it down using two trusted brands: LUX (Unilever) and Colgate (Colgate-Palmolive) • In India – Smaller SKUs = More Value Per Gram In India, brands often price smaller SKUs more aggressively, making them more economical per gram especially for low-income consumers or frequent buyers. Lux International Creamy Soap • 75g = ₹30 → ₹0.40/g • 125g = ₹83 → ₹0.66/g Colgate Toothpaste • 23g = ₹10 → ₹0.43/g • 36g = ₹20 → ₹0.56/g • 100g = ₹78 → ₹0.78/g (Source: URBAN GROCERY MART) Key Insight: Intense market competition, especially in rural and tier 2/3 cities, forces brands to use small SKUs as value-led entry points to win market share. • In Pakistan – Larger SKUs = More Value Per Gram In contrast, Pakistan’s pricing strategy often favors larger SKUs, encouraging consumers to buy more and save more. Lux Nourished Glow Soap • 98g = Rs. 120 → Rs. 1.22/g • 128g = Rs. 150 → Rs. 1.17/g Colgate Toothpaste • 45g = Rs. 66 → Rs. 1.47/g • 75g = Rs. 90 → Rs. 1.20/g (Source: Naheed) Key Insight: With less retail competition and a culture of bulk/monthly shopping, brands position larger SKUs as offering better long-term value. Why This Difference Exists? • Shopping Patterns & Channels India has high kiryana density, daily purchases Pakistan has monthly or bulk purchases via utility stores or supermarkets • Inflation & Price Locking Pakistani consumers prefer larger SKUs to hedge against rising prices • Market Competition India’s FMCG sector is hyper-competitive, especially in personal care and oral hygiene Pakistan sees fewer competitors per category, so pricing strategies are less aggressive • Consumer Segments & Affordability Indian brands use small SKUs to penetrate deep into price-sensitive markets In Pakistan, value messaging is centered on family-size efficiency • Operational Strategy In India, volume-driven pricing works due to scale In Pakistan, logistics and inflation management often favor larger packs Same brand, same product but entirely different pricing logic. This shows how deeply local insights influence SKU strategy in FMCG. Understanding regional behavior, competition, and consumer psychology is essential for success. Would love to hear your thoughts, have you observed similar pricing shifts in other markets or sectors? #FMCG #PricingStrategy #SKUManagement #India #Pakistan #ConsumerInsights #BrandStrategy #RetailMarketing #Colgate #Lux #MarketResearch

Let's face it - crafting a robust transfer pricing policy isn't just about saying “limited risk distributor! Operating margin 3%”. It's about building a framework that can withstand scrutiny and adapt to the ever-shifting sands of international tax. Here are 7 key elements: ► Economic substance alignment Your policy should reflect the actual value creation within your group. We need to bridge that gap between legal form and economic reality. This means a deep dive into your value chain, not just superficial breakdowns. ► Flexibility with guardrails The business world moves fast. Your policy needs to be agile enough to accommodate changes, but with clear boundaries. Think of it as a playground - lots of room to play, but with a solid fence to keep things in check. Introduce your business folks to that playground! ► Operational feasibility A policy that looks great on paper but falls apart in practice is worse than useless. Work closely with your finance and operations teams to ensure your policy can be implemented without causing operational headaches. Remember the tale of FairyTale Inc? Don't let that be you. ► Robust benchmarking No vague comparables and unexplained exclusions. Your benchmarking needs to stand up to increased scrutiny. Document your process meticulously, justify your choices, and be prepared to defend them. "Clear explanations for judgments and positions taken" HMRC (c). ► Clear intercompany agreements Your legal framework should mirror your economic substance. Ensure your intercompany agreements clearly outline roles, responsibilities, and risk allocation. These aren't just paperwork - they're your first line of defense in a dispute. ► Profit allocation logic Your profit allocation needs to be more than just a mathematical exercise. It should reflect a clear understanding of where value is created in your business. ► Monitoring and adjustment mechanisms A set-it-and-forget-it approach won't cut it. Build in regular review processes and clear triggers for when adjustments are needed. What other elements do you think are crucial? Have you faced challenges implementing any of these? Let's keep this conversation going - after all, in the world of transfer pricing, standing still is moving backwards.

Over the past few weeks, I’ve had conversations with clients across Europe, the Middle East, South America, and Africa (EMESA) who are navigating the new era of #trade policy uncertainty. It’s clear that trade policy is no longer a background factor: It’s center stage—and boardroom critical. And while the headlines might focus on China and the US, the ripple effects are already hitting businesses in our region: from pricing pressures to supply chain reconfigurations. What’s clear: businesses can’t afford to wait and see. - Companies must assess where they’re exposed—product by product, market by market. - They need a “tariff command center”—an agile team that can scenario-plan and act fast. - And above all, they must build geopolitical muscle: the ability to respond strategically to shocks that may not follow past patterns. At Boston Consulting Group (BCG), we’ve been working side-by-side with clients across EMESA to navigate this uncertainty—not with panic, but with clarity and readiness. Our latest article breaks down the EU’s phased approach and how companies can respond: https://lnkd.in/eA7Sf8h2 Here’s my key takeaway for you to keep in mind: #Resilience is no longer a luxury. It’s a necessity.

The World’s Payment Systems Aren’t Broken, They’re Just Not Speaking The Same Language. Imagine a world where payment initiation is seamless, compliance checks are real-time, and reconciliation happens without a hitch—all powered by standardized APIs. The Bank for International Settlements – BIS has just released a groundbreaking report on the harmonisation of APIs to enhance cross-border payments. This report is a game-changer, highlighting how standardising APIs can revolutionise the efficiency, cost, and transparency of global transactions. Key Takeaways: > Efficiency Gains: APIs streamline payment initiation, back office processes, and reconciliation, reducing manual interventions and operational costs. > Enhanced Transparency: Real-time updates and automated reconciliation improve transparency and trust in cross-border transactions. > Innovation and Collaboration: Harmonised APIs foster innovation, enabling businesses to offer new and improved services. So, what do these developments mean for businesses involved in cross-border payments, and how should they respond to them? >Adopt API Standards Early: Align with ISO 20022 to stay competitive. > Invest in Developer Resources: Equip teams to integrate harmonized APIs efficiently. >Collaborate Across Ecosystems: Engage with global standard-setting bodies to influence adaptable, industry-aligned practices. Here's what I think will happen to cross-border payments in the future in light of these recent developments. These are my three predictions about the future of cross-border payments: 1️⃣ Faster, Cheaper, and Transparent Payments Will Become the Norm: With initiatives like ISO 20022 adoption and pre-validation APIs, transaction costs and delays will drop significantly. Businesses and consumers will demand this simplicity as a baseline. 2️⃣ Interlinked Payment Systems Will Define the Global Economy: API harmonization will act as the backbone for linking real-time payment systems worldwide. Think of it as the financial internet where payments flow as seamlessly as data does today. 3️⃣ A Surge in Open Ecosystems: Collaboration between fintechs, banks, and regulators will create platforms that are not only interoperable but also foster unprecedented innovation. Security and trust will be the driving forces here. The future of cross-border payments hinges on one key ingredient: API harmonization. API harmonisation is a complex and lengthy process involving diverse stakeholders. Continuous collaboration and monitoring are essential to achieve the G20 targets for cross-border payments. With this in mind, Join the Emerging Payments Association Asia (EPAA) at the 5th APAC Fintech Payments Forum for an exclusive opportunity to dive into the CPMI-recommended toolkit for API harmonisation across borders. [Details in comments] How do you see API harmonization reshaping cross-border payments in your region? Drop your thoughts or questions in the comments below!

The evolution of payment methods is reshaping the way we pay, but how do merchants handle this constant change on a global scale? The past few years have seen an explosion in alternative payment methods (APMs) available to consumers, driven by rapid advancements in technology, growing consumer expectations for seamless experiences, and increased awareness of data privacy. With a myriad of options like digital wallets, cryptocurrencies, and mobile payment apps, consumers now expect the flexibility to choose how they pay. For large merchants, managing such a diverse ecosystem of payment methods can seem overwhelming. However, there are strategies to ensure a smooth integration and management of these options, ultimately providing the best customer experience: Partner with a reliable payment orchestration provider: A well-established payment orchestration platform can handle hundreds of APMs on a global scale, providing merchants with a unified platform for easy management, reduced operational complexity, and region-specific security features. Prioritize popular APMs: Focus on integrating the most widely-used APMs in your target market, while also keeping an eye on emerging trends to stay ahead of the competition. Optimize user experience: Seamless integration of APMs into your existing checkout process is crucial. Design user interfaces that cater to various preferences and devices, ensuring a frictionless payment experience for all customers. Prioritize security and compliance: As you adopt new payment methods, be vigilant about maintaining strict security standards and staying compliant with relevant regulations to protect your business and customers. Stay agile and adaptable: The payments landscape will continue to evolve. Be prepared to iterate on your payment processes and adopt new technologies as they emerge to stay relevant and competitive. By proactively managing the integration of alternative payment methods, large merchants can unlock new opportunities, provide better customer experiences, and stay ahead in the rapidly changing world of commerce. Source Ali Ahmed #payments #fintech #digitalwallets

𝗖𝗹𝗼𝘂𝗱 𝗯𝗶𝗹𝗹𝗶𝗻𝗴 - 𝗧𝗵𝗲 𝗵𝗶𝗱𝗱𝗲𝗻 𝗰𝗼𝘀𝘁 𝗻𝗼 𝗼𝗻𝗲 𝘁𝗮𝗹𝗸𝘀 𝗮𝗯𝗼𝘂𝘁 There’s one silent killer that doesn’t show up in FinOps dashboards: That is - currency conversion costs. Cloud providers bill in their default currency, usually USD, while your business operates in INR, EUR, GBP, or any other local currency. This means every invoice gets converted at the provider’s exchange rate, not yours - and those rates aren’t always in your favor. Imagine a company in India consuming AWS services worth $50,000 per month. AWS bills in USD, but the company pays in INR. Here’s the catch: > AWS uses its own currency conversion rate, which is typically higher than the official exchange rate. > Banks charge foreign transaction fees (1–3% per transaction). > Exchange rates fluctuate, so what you budgeted in INR may not match what you actually pay. Let’s assume: > Official exchange rate: 1 USD = 82 INR > AWS’s applied exchange rate: 1 USD = 83.5 INR > Bank transaction fee: 2% on total amount Actual Cost in INR: > 50,000 x 83.5 = ₹41,75,000 > Bank transaction fee (2% of ₹41,75,000) = ₹83,500 > Total INR paid = ₹42,58,500 That’s ₹1,58,500 ($1,915) lost every month - ₹19,02,000 ($22,980) per year. And this is just one example. Scale this up for global enterprises running multi-million-dollar cloud workloads, and the hidden currency conversion losses could fund an entire FinOps team! Why This Cost Is Often Ignored > It’s not in FinOps dashboards – Most cloud cost tools focus on compute/storage costs, not financial inefficiencies in payments. > It's bundled into "Miscellaneous Fees" – Cloud invoices don’t clearly break down currency markup and bank charges. > It’s assumed as “business as usual” – Most companies treat it as an unavoidable cost, never questioning how to optimize it. The Most Practical Solutions are: ✓ Multi-Currency Cloud Accounts(If available) ✓ Pay via Local Cloud Resellers ✓ Use FinOps to Track Forex Impact ✓ Leverage Corporate Forex Solutions ✓ Prepaid Cloud Commitments in USD For stable workloads, consider pre-loading cloud credits in USD when the exchange rate is favorable. Some enterprises bulk-purchase AWS/Azure/GCP credits when their local currency is strong against USD, locking in savings. So the next time you’re reviewing your cloud bills, don’t just look at how much you’re using - check how you’re paying for it. 𝘋𝘪𝘴𝘤𝘭𝘢𝘪𝘮𝘦𝘳: 𝘛𝘩𝘦 𝘦𝘹𝘢𝘮𝘱𝘭𝘦𝘴 𝘩𝘦𝘳𝘦 𝘢𝘳𝘦 𝘫𝘶𝘴𝘵 𝘧𝘰𝘳 𝘪𝘯𝘧𝘰𝘳𝘮𝘢𝘵𝘪𝘰𝘯𝘢𝘭 𝘱𝘶𝘳𝘱𝘰𝘴𝘦𝘴 - 𝘯𝘰𝘵 𝘢 𝘰𝘯𝘦-𝘴𝘪𝘻𝘦-𝘧𝘪𝘵𝘴-𝘢𝘭𝘭 𝘴𝘰𝘭𝘶𝘵𝘪𝘰𝘯. 𝘈 𝘭𝘰𝘵 𝘮𝘰𝘳𝘦 𝘧𝘢𝘤𝘵𝘰𝘳𝘴 𝘤𝘰𝘮𝘦 𝘪𝘯𝘵𝘰 𝘱𝘭𝘢𝘺, 𝘭𝘪𝘬𝘦 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴 𝘯𝘦𝘦𝘥𝘴, 𝘳𝘦𝘨𝘪𝘰𝘯𝘢𝘭 𝘤𝘰𝘯𝘴𝘵𝘳𝘢𝘪𝘯𝘵𝘴, 𝘢𝘯𝘥 𝘤𝘰𝘮𝘱𝘭𝘪𝘢𝘯𝘤𝘦 𝘳𝘦𝘲𝘶𝘪𝘳𝘦𝘮𝘦𝘯𝘵𝘴. 𝘛𝘩𝘦 𝘳𝘪𝘨𝘩𝘵 𝘢𝘱𝘱𝘳𝘰𝘢𝘤𝘩 𝘥𝘦𝘱𝘦𝘯𝘥𝘴 𝘰𝘯 𝘺𝘰𝘶𝘳 𝘴𝘱𝘦𝘤𝘪𝘧𝘪𝘤 𝘤𝘢𝘴𝘦, 𝘴𝘰 𝘥𝘰𝘯’𝘵 𝘫𝘶𝘴𝘵 𝘵𝘢𝘬𝘦 𝘵𝘩𝘪𝘴 𝘢𝘯𝘥 𝘳𝘶𝘯 - 𝘵𝘩𝘪𝘯𝘬 𝘣𝘦𝘧𝘰𝘳𝘦 𝘺𝘰𝘶 𝘰𝘱𝘵𝘪𝘮𝘪𝘻𝘦. #FinOps

Mirror Accounts - Part 1 If you are from BFSI or Payment domain, you must have heard this term called "Mirror Accounts" and If you are from payment investigation team you very frequently get to work with "Mirror Accounts". So let's understand the term, their types and usage. Mirror accounts are essentially copy of the account held by the corresponding bank (nostro account). They are important for reconciliation purposes, enabling both banks to keep their records synchronized. Mirror Accounts are used to track the balances and transactions between two banks, typically across countries or regions. They allow each bank involved in international transactions to keep a clear record of the money it holds on behalf of the other bank. Types of Mirror Accounts 1. Nostro Mirror Account : This is a mirror image of the Nostro Account maintained by the foreign bank at the domestic bank. It reflects the exact balance held by the domestic bank with the foreign bank, but it is maintained in the local currency. The purpose is to keep a local record of the transactions an led balance that the domestic bank has in its foreign account. For example : An Indian bank has a U.S. dollar account with a bank in the U.S., that account is called a nostro account. When the domestic bank makes or receives payments in that foreign currency, it adjusts the balance of this nostro account. To track and monitor transactions easily, banks maintain a nostro mirror account at their end. This account mirrors the exact balance and movements of funds in the foreign nostro account but is maintained in the domestic currency. 2. Vostro Mirror Account : This is a mirror image of the Vostro Account which a foreign bank holds with the domestic bank. It reflects the transactions and balances of the foreign bank’s holdings, maintained in local currency. It helps the domestic bank monitor the funds it holds on behalf of the foreign bank. For example : Bank B (UK-based) needs to hold an account in US dollars (USD) with Bank A (USA). Bank A creates a Vostro account for Bank B in USD. This allows Bank B to settle transactions in USD through Bank A, and Bank A manages this account on behalf of Bank B. To keep track of this Vostro account, Bank B creates a mirror account on its own ledger, denominated in GBP (British Pounds), reflecting the balance of the USD account held with Bank A. The mirror account shows how much money Bank B has in its USD account with Bank A but converted to GBP for its own records.

Cross-border payments drive global commerce despite traditional systems remaining costly and slow. Financial institutions are actively redefining this landscape with technologies like blockchain and real-time networks, enabling faster, cheaper, and more transparent solutions. Visa’s “Optimising Cross-Border Payments Globally” outlines key trends reshaping global payments infrastructure. ✅ Market Expansion APAC cross-border flows projected at USD $250T by 2027 B2B payments expected to exceed USD $100T by 2025 Cross-border e-commerce: 30% of consumers buy internationally every week ✅ Technology Priorities Blockchain: powering real-time liquidity, transparency, and 24/7 settlement Tokenised deposits: improving speed, security, and lowering cost AI/ML: automating fraud detection, compliance, and payment routing Generative AI: projected 36% CAGR (2023-30) in banking, supporting digital ID verification and real-time risk control ✅ Standards + Interoperability ISO 20022: enabling structured data, better compliance, reduced disputes ASEAN links: PayNow-PromptPay, PayNow-DuitNow, and Project Nexus — driving real-time cross-border flows G20 roadmap: focus on speed, cost, access, and transparency ✅ Collaboration Imperative Banks: infrastructure + trust Fintechs: innovation + agility Regulators: compliance + interoperability Networks: seamless integration + fraud resilience Full Report: https://lnkd.in/g2yvedSn #payments #iso20022 #ai #financialservices #trade #blockchain #stablecoins