Technology Revolutionizes Cross-Border Payments, Declares The Payments Association
In the ever-evolving landscape of cross-border payments, technology stands as the «key delta» driving advancement, according to a recent whitepaper released by The Payments Association. This document underscores the importance of innovation and collaboration within the payments industry to propel cross-border transactions into the future, as highlighted in The Fintech Times News.
Over the past decade, cross-border payments have seen significant developments due to the globalization of trade, capital, and migration flows. Despite these achievements, the reality remains that cross-border payments continue to be prohibitively expensive, disproportionately affecting vulnerable populations.
While domestic payments have witnessed consistent advancements, transitioning into instant and entirely digital transactions, the same cannot be said for cross-border payments. These international financial transactions have yet to fully harness the transformative power of digital technologies.
To address this issue, The Payments Association’s cross-border working group has undertaken an examination of the challenges faced by financial institutions (FIs) when striving to facilitate cross-border payments. Their findings are presented in a newly published whitepaper titled ‘King for a Day: Charting the Future of Cross-Border Payments.‘
One of the key insights from the report emphasizes the need for the industry’s focus to shift away from legacy regulatory concerns and toward the adoption of adaptable, rules-based inputs that can facilitate communication between various regulatory regimes.
Rasika Raina, Senior VP of Product Management for Cross-Border Payments at Mastercard, offered her perspective: «Our competition is archaic technology, not the banks. The problem is that today the industry is, in some cases, using 40 to 50-year-old technology and arrangements, like correspondent banking, to address a $156 trillion cross-border payments sector.»
Gary Palmer, CEO of Payall, also weighed in on the report, stating, «Globalization has impacted every aspect of our lives, from how we work, receive medical care, communicate, shop, pay, and travel, all thanks to technological transformations. Almost every facet of our lives is unrecognizable compared to a few years ago, let alone 50 years ago. However, this transformation has been slow to reach the realm of cross-border payments. The question we must continually ask is whether money can move globally at the speed of data.»
He further explained that the whitepaper, developed through industry surveys and expert interviews, challenges the status quo with thought-provoking questions, relevant research, and innovative ideas. It ultimately suggests that technology and new paradigms will revolutionize the complex, high-risk, and manually-intensive nature of cross-border payments.
Tony Craddock, Director General of The Payments Association, emphasized the significance of the research, stating, «Payments are experiencing phenomenal growth, with cross-border transactions still presenting a substantial opportunity. This crucial research underscores how technology will be the driving force behind reducing friction in the industry, enabling individuals to retain more of their money and receive it faster.»