It wasn't so long ago that people lived, worked, and died within just a few miles of where they were born. And while there are places in the world where this is still the case, the lives of people in many countries are increasingly mobile. 

People on the move

Today, a growing number of workers seek out excitement, adventure, or better pay packets by travelling to new countries, and the rise of remote working means this is easier to do than ever. According to one study, 42% of employees say they want to use their company’s remote working policy to work from abroad. Seventy-two percent of UK workers say they would move abroad for work to boost their careers or improve their work-life balance.

But it's not just workers who have the travel bug, increasing numbers of retirees are packing their bags and heading to more accommodating climes. In the UK for instance, it's thought that an astonishing 79% of people want to retire abroad, with nearly half (49%) citing better weather as the main driver. With inflation still running rampant, it's also likely that more people will retire in countries where their dollars, euros, or sterling will go a little further.

The payments problem

All this travel comes with a downside, however, when it comes to pensions. Employers and employees need to be able to pay into their pensions easily regardless of location. Retirees have the opposite but equally challenging problem: ensuring they can access their pensions from wherever they settle. International pension providers cater to these needs, but they face a considerable challenge when it comes to managing cross-border payments.

It goes without saying that cross-border pension payments need to be fast, reliable, and cost- effective. Savers and retirees alike do not want to see their funds eaten away by transfer fees and charges. Meanwhile, retirees need peace of mind that their payments will arrive in their bank account when needed. After all, those daiquiris aren't going to pay for themselves. 

Complexity, cost, and delay

The challenge is that international payments are often highly complex. International pension providers must navigate different tax laws, social security systems, and currency exchange rates, all while ensuring compliance with the regulations at home and in the country of retirement. 

And then there's the complexity of global payment systems. Pension providers typically use multiple payment partners, and they each have their own contracts, rates, and terms that must be navigated. All this means that cross-border pension payments often take days to process and are expensive, as each middleman takes a cut. And that's when things are going well. If something breaks on the payments network, the complexity of the system can make it difficult to find the fault or identify which party is responsible.

Introducing a full-stack approach

Fortunately, recent advances in payments technology mean that pension providers can finally overcome the challenges of cross-border payments. One key innovation is around replacing multiple partners with a consolidated infrastructure layer that can handle payouts, collections and settlements in multiple markets all through one platform. 

This approach, referred to as payments curation, provides access to hundreds of countries and currencies through a single platform, which both increases and simplifies access to local payment networks and eliminates the friction and cost that comes with processing payments through intermediaries.

Pension providers that implement this consolidating infrastructure layer can reduce payment errors and lower the overall administrative burden as they have greater visibility of their payments, which also helps to improve compliance and cost control. 

Competing through payments

Workers and retirees are on the move. Pension funds that can respond to this trend and ensure the highest levels of support to their intrepid clients will put themselves at a competitive advantage. Delivering seamless cross-border payments and payouts is a core part of this goal, and one that can best be achieved through payments curation.