The real challenges of cross-border business verification for payment companies

Cross-border commerce is experiencing explosive growth, affecting how businesses operate around the globe. A study by payment expert Juniper Research predicted 108% market growth for cross-border e-commerce over the next several years, increasing from $1.6 trillion in 2023 to more than $3.3 trillion by 2028.

This rapid change has created both opportunities and challenges for payment companies. While global expansion opens doors to new markets and customers, it also increases the pressure to ensure effective cross-border business verification—often amid complex and evolving regulations.

Consider Klarna, the globally recognized "buy now, pay later" platform. In 2024, the company faced a $50 million fine in Sweden for failing to meet anti-money laundering (AML) requirements. The company’s systems failed to identify high-risk transactions and implement proper controls, exposing critical gaps in its compliance processes.

This is just one of many examples that show how business verification challenges can lead to significant financial and reputational harm. Overcoming these obstacles demands a thoughtful strategy that prioritizes both compliance and operational efficiency.

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Cross-border verification in a globalized economy

Modern technology has made it easier than ever for businesses to connect with customers around the world, and payment companies are at the center of this shift. However, as cross-border transactions increase, so does the pressure on payment companies to quickly and accurately verify the businesses they work with.

Fraud and financial crime are becoming more sophisticated, and regulators are stepping up requirements to counteract these risks. From Know Your Business (KYB) rules to stricter anti-money laundering (AML) standards, the stakes for compliance are increasingly higher. With billions of dollars moving across borders daily, even minor gaps in verification can disrupt operations and weaken the integrity of payment networks.

Real-time compliance checks are one of the biggest trends shaping cross-border business verification. It’s no longer acceptable for payment companies to verify businesses in days or even hours. Instead, customers and regulators demand decisions in seconds.

In a fast-paced environment where delays can quickly become lost opportunities, payment companies must adopt verification technology that enables instant, accurate decision-making. This strengthens security by flagging potential risks as they happen and gives companies the efficiency needed to stay ahead.

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Key challenges associated with cross-border verification

As the industry continues to evolve, payment companies must face increasingly complex global challenges that can slow processes, strain resources, and leave them vulnerable to risk.

Here are a few of the most common roadblocks to effective cross-border business verification:

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Legal and regulatory hurdles

Each country has its own laws regarding data privacy, beneficial ownership, and business verification, often leading to inconsistencies and delays. The lack of global alignment makes it difficult to create a standardized approach, forcing payment companies to adapt to a patchwork of regulations. In addition, frequent legal changes in verification requirements may require continual adjustments to compliance processes.

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Changing AML regulations and KYB obligations

AML compliance is becoming increasingly complex. Payment companies are expected to identify ultimate beneficial owners (UBOs), verify ownership structures, and meet growing KYB obligations. These requirements add more layers to the verification process and demand more resources and technological solutions to keep up.

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Data fragmentation and accessibility

Accurate business verification depends on access to reliable data, but in many regions, this data is fragmented, outdated, or stored in inconsistent formats. Low transparency in high-risk jurisdictions makes the process even more challenging, leaving companies to piece together incomplete information.

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Operational bottlenecks

Manual processes, outdated systems, and data access issues create bottlenecks that slow down verification. As the volume of global businesses increases, these inefficiencies can strain resources and delay decision-making, leading to missed opportunities or increased risk.

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The role of technology in smarter verification

Advanced business verification solutions, such as those provided by Markaaz, use the latest technology to create smarter and more efficient cross-border business verification processes. Artificial intelligence (AI) and machine learning (ML) analyze vast datasets to identify risks and detect anomalies with exceptional accuracy, speeding up verification and reducing the likelihood of human error. This improves efficiency and enables predictive analytics that help payment companies identify patterns and anticipate potential risks before they escalate.

Integrated platforms are becoming increasingly popular, providing payment companies with centralized solutions to manage compliance workflows. By consolidating data and processes in one place, these platforms improve efficiency and enable seamless collaboration across teams.

Other innovations, such as blockchain technology, provide secure and transparent records that cannot be altered. This added reliability helps payment companies trust the data they rely on, especially in high-risk jurisdictions where transparency is often lacking.

Markaaz enhances these advancements by combining real-time access to a global database of over 500 million businesses with AI-driven risk analysis, allowing payment companies to verify businesses faster and more confidently.

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Strengthen your cross-border business verification

As cross-border commerce grows, payment companies need strategies and tools that simplify compliance while reducing risks. Addressing regulatory complexity, fragmented data, and operational bottlenecks requires the right strategies and tools.

Markaaz provides payment companies access to accurate, real-time business data and advanced risk analysis, making verification faster and more reliable. By streamlining processes and improving decision-making, Markaaz helps companies stay ahead in an increasingly competitive market.

Want to simplify compliance and strengthen your business verification process? Connect with our team to see how Markaaz can help.

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