Mastercard and Alipay Forge Path for Seamless Cross-Border Payments

In an era marked by the relentless march of digital innovation, the landscape of remittances is undergoing a profound transformation. Alan Marquard, head of transfer solutions at Mastercard, emphasized to PYMNTS that this transformation is steering towards digital channels and digital wallets, promising cheaper, faster, and more convenient international fund transfers.

Mastercard’s recent collaboration with China’s Alipay, announced earlier this month, represents a significant stride in this direction. This partnership extends a lifeline to bank, FinTech, and corporate clients, offering them a seamless connection to Alipay’s e-wallet, which boasts over a billion users.

Marquard underscored that while the practice of sending money across borders is nothing new, the pandemic has spurred a surge in digitized payment methods. With the rise of the gig economy and professionals embracing flexible working arrangements across borders, the demand for efficient international remittances has soared. Concurrently, the proliferation of online platforms has further fueled the need for streamlined cross-border payment solutions.

He noted to PYMNTS, «At the end of the day, payment needs drive payment types,» emphasizing that digitized experiences tend to offer superior value compared to convoluted chains of payments laden with fees.

Traditionally, cross-border payments have been encumbered by multiple intermediaries within the correspondent banking system, resulting in exorbitant fees averaging around 6% of the transaction. Recognizing the urgency to enhance cross-border payments, the G20 has identified speed, cost, and transparency as critical areas for improvement.

Despite cash endpoints remaining prevalent in many remittance corridors, digital wallets are gaining traction as conduits for end-to-end digital fund flows. Marquard highlighted that digital wallets are evolving into cross-border mechanisms, particularly in regions like China, where accessing bank branches can be challenging, especially in remote areas.

The collaboration with Alipay builds upon Mastercard’s integration into the Alipay wallet, enabling consumers to utilize cards seamlessly, including through QR codes. Marquard emphasized that this partnership addresses the substantial demand for remittances to China, one of the largest destinations for inbound remittances globally. With a robust infrastructure in place, payments can now be delivered almost instantly, with transparent fee structures ensuring that recipients receive the exact amount needed.

The recent announcement underscores Mastercard’s steadfast commitment to enhancing cross-border payments through its Mastercard Move services, which span 10 billion endpoints and cover over 95% of the world’s banked population across 280 countries. For smaller players in the payment ecosystem, including second- or third-tier banks and smaller money transfer entities, the challenge of maintaining a global network with compliance and fraud capabilities has been daunting.

Marquard outlined Mastercard’s vision for Mastercard Move as a comprehensive money transfer offering, capable of facilitating various transactions, including payroll cross-border, gaming payments, and B2B transactions. The ultimate goal, he emphasized, is to ensure that every payment to any endpoint can be serviced seamlessly, thereby advancing financial inclusion on a global scale.

The partnership between Mastercard and Alipay heralds a new era of seamless cross-border payments, powered by digital wallets and underpinned by a commitment to efficiency, transparency, and financial inclusion.

Other articles
The Transformation of the Insurance Sector by AI
Discovering Open Banking Benefits for Consumers and Companies With Prometeo
Galileo Introduces Wire Transfers for FinTechs
Revolutionizing Automotive Transactions: The Integration of In-Car Payments
The ESG FinTech Sector: Is it Expanding Rapidly Enough?
Consumers Can Save for Purchases Via Save Now, Buy Later Fintech
Banking-as-a-Service: Navigating the Upheaval
Digital Vehicle Wallets Revolutionize Connected Car Payments
The Influence of Global Regulatory Compliance on Financial Services
Artificial Intelligence: The Key to Financial Inclusion
Visa Offers Travelers a Digital Card Replacement Service
Next-Gen Biometric Payment Cards Launched by Fingerprints and Valid
Financial Services Sector Hesitant to Adopt AI
Signicat: Organisations Are Still Unprepared to Fight AI-Driven Fraud
Bowhead Specialty and Kalepa Improve AI-Driven Underwriting