How does a payment processing SaaS process outward remittances?
A payment processing Software-as-a-Service (SaaS) solution typically follows a structured process to handle outward remittances efficiently. Here's a general overview of how a payment processing SaaS solution processes outward remittances:
Transaction Initiation: The remittance process begins when the bank or its customer initiates an outward remittance request. This can be done through the SaaS solution's user interface, which may be accessible to bank staff or directly to the bank's customers via a self-service portal. The requester provides the necessary details, such as the beneficiary's information, amount to be remitted, and any specific instructions or purposes for the remittance.
Beneficiary Verification: The SaaS solution performs verification checks on the beneficiary to ensure compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations. This may involve validating the beneficiary's identity, verifying their account details, and screening against sanction lists and other compliance databases. The SaaS solution may use automated processes and data sources to expedite this verification process.
Compliance Review: The payment processing SaaS solution conducts a compliance review to ensure that the remittance request adheres to regulatory requirements and internal policies. This includes assessing the transaction for any suspicious or potentially fraudulent activities. The SaaS solution may employ rule-based algorithms and risk assessment models to identify and flag high-risk transactions for further scrutiny.
Currency Conversion: If the remittance involves a currency conversion, the SaaS solution facilitates the conversion process. It retrieves real-time exchange rate data and performs the necessary calculations to convert the remittance amount from the sender's currency to the beneficiary's currency. The SaaS solution may integrate with external currency exchange providers or utilize its own exchange rate feeds to ensure accurate conversions.
Transaction Routing: Once the compliance review and currency conversion are completed, the SaaS solution routes the remittance transaction to the appropriate payment network or correspondent bank. It generates the necessary payment instructions, including the beneficiary's account details, payment purpose codes, and any accompanying messages or documentation required by the receiving financial institution.
Transaction Settlement: The payment processing SaaS solution facilitates the settlement of the remittance transaction. It leverages existing payment networks and infrastructure to transfer funds from the sender's account to the beneficiary's account. This may involve communication and coordination with intermediary banks or correspondent banks to facilitate the cross-border transfer.
Transaction Tracking and Notifications: Throughout the remittance process, the SaaS solution provides real-time tracking and status updates to both the bank and its customers. It may offer a tracking dashboard or notifications via email or mobile app, allowing stakeholders to monitor the progress of the remittance from initiation to final settlement. This transparency and visibility enhance customer satisfaction and provide assurance to all parties involved.
Reporting and Reconciliation: The payment processing SaaS solution generates reports and reconciles the remittance transactions for the bank's internal accounting and reporting purposes. These reports may include transaction logs, settlement summaries, revenue analysis, and compliance reports. The SaaS solution may also integrate with the bank's existing reconciliation systems to ensure accurate and timely financial reporting.
By leveraging a payment processing SaaS solution, banks can streamline their outward remittance operations, automate compliance checks, facilitate currency conversions, enhance transaction tracking, and improve overall efficiency in handling cross-border payments.
Fable Fintech creates customizable international remittance SaaS solutions / white-label money transfer software / open banking APIs / white-label global payments platforms (SaaS/PaaS)/ Forex rate systems for banks and financial institutions. Fable Fintech also provides cross border B2B, DTC remittance solutions for businesses along with Fx rate systems. Learn more about cross-border remittances and international payment technology on Fable Fintech’s global payments blog