Explore how technology is reshaping cross-border payments, as highlighted in a recent whitepaper from the Payments Association.
According to a recent whitepaper from the Payments Association, which honours creativity and teamwork within the payments sector, technology is the “key delta” in the battle for cross-border payments advancement.
The previous ten years have seen a steady growth in cross-border payments due to the globalisation of capital, trade, and migration patterns. The truth is that cross-border payments are still unduly costly, putting the most vulnerable people behind, even in spite of these reasons and achievements.
Cross-border payments, which have not yet benefited from the revolutionary potential of digital technology, do not have the same trajectory as domestic payments, which are steadily advancing and innovating to become instantaneous and fully digital.
In light of this, the cross-border working group of the Payments Association explores the difficulties that financial institutions (FIs) encounter while attempting to process cross-border payments in their recently released whitepaper, “King for a Day: Charting the Future of Cross-Border Payments.”
A primary focus of the research is the need for industry oversight to “pivot” away from outdated regulatory challenges and towards the use of technologies including “adjustable, rules-based inputs, that can interface between distinct regimes.”
Mastercard’s senior vice president of product management for cross-border payments, Rasika Raina, clarified, saying, “Our rivalry isn’t the banks; it’s outdated technology. The issue is that, in certain instances, the industry is still addressing a $156 trillion cross-border payments market using 40–50 year old technology and practises, such as correspondent banking.
“Cross-border trade still offers enormous potential”
Payall CEO Gary Palmer also shared his thoughts on the findings, saying, “Every nation, city, and even isolated village is impacted by globalisation. The rapid advancement of technology has had a profound impact on how we work, receive healthcare, communicate, shop, pay for our experiences, and travel.
All in all, almost every aspect of our life has changed drastically over the past few years and is completely unrecognisable from fifty years ago. Not in terms of international payments. Is money able to move globally at the same speed as data? is a question we need to keep attempting to answer.
“This whitepaper challenges the status quo with provocative questions, relevant research, and new ideas. In the end, it suggests that tech and new paradigms will transform the complex, high-risk, and manual mess we call cross-border payments.” The whitepaper was completed through an industry survey and interviews with leading experts.
The Payments Association’s director general, Tony Craddock, made the following observation: “With payments growing at such an incredible rate, cross-border payments still present a huge opportunity.” This important study helps to explain how technology will be the primary force behind the industry’s efforts to lower friction and allow consumers to keep more of their money and receive it faster.
