PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

The Rise of Instant Cross-Border Payments: Boon or Bane for Banks?

By Steve Murphy
October 18, 2021
in Analysts Coverage, Commercial Payments, Cross-border Payments
0
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
faster payments

Another foray into cross-border payments, this one dropped in ASEAN Business and stays pretty much with APAC and that sub-region’s advancements in the space, starting with domestic real-time payments both existing and almost ready for deployment. Readers familiar with the ASEAN acronym will know it is an economic development association comprised of ten southeast Asian nations. So, we have been covering these various articles about efforts there to conduct cross-border real-time payments between several of the countries. The author discusses these and what more needs to be done.

‘The APAC region has traditionally been a pioneer in terms of fast payments technology, with Japan launching its Zengin payment system over 40 years ago. Eleven countries in APAC now have active real-time payment networks – including Singapore’s FAST network, which was launched in 2014 – whilst five other countries are getting their own networks ready for launch. APAC has also taught the world how to harness mobile apps, QR codes and contactless technology to make instant payments a simple and convenient process, establishing them as the preferred payment methods for many consumers and businesses…

However, whilst simple, fast and free domestic payments have become the norm across APAC, the same cannot be said for international payments. Sending money between countries has typically meant long processing times and high transaction fees, with fees in ASEAN often being well above the UN’s Sustainable Development Goal of 3 per cent, according to the Asian Development Bank. This is far from ideal in a region where an estimated 320 million people rely on money sent from abroad by family members, and at a time where SMEs are seeking to trade more internationally.’

The author then goes on to discuss whether or not banks are in position to capitalize on the new rails and capabilities in this space. Since most non-P2P x-border transactions are still initiated through FIs, we don’t see why not. We are not sure about the article’s claim that ISO 20022 messaging will play a role in 80% of all payments transactions by 2025 but it will certainly be a much larger percentage than now, since domestic wire systems are converting over, as is SWIFT, so B2B and other high value flows will be moving under that messaging standard. The point is that banks will be modernizing their infrastructure to adapt, so should also be able to play a large role in real-time cross border.

‘There is also another huge opportunity for banks to collaborate with corporates that want to offer cross border payments services under Banking as a Service (BaaS), a new model which enables non-banks to build banking offerings on top of an established bank’s regulated infrastructure. To avoid being left behind, banks must collaborate with these fintechs, technology and service providers to take advantage of new cross-border payment rails and develop innovative new services that provide added value to the customer…

Through a combination of central bank-driven agreements, standardisation and technological innovation, real-time cross border payments are a reality. The benefits are many, both for consumers and businesses, and the potential for non-bank players to find new revenue streams means the proliferation of new agreements and services will continue at a pace. With more opportunities to deepen, expand and monetise transactional relationships, it’s a no-brainer that this will be the way forward for banks, with fast movers gaining from the first mover advantage.’

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Tags: APACCross-BorderCross-Border PaymentsInstant PaymentsISO 20022Real Time PaymentsReal-time payments

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    push notification bank

    From Bland to Beneficial: Using Push Notifications to Reach Business Customers

    May 16, 2025
    recurring payments, PCI Compliance for small business, Fintech for Underserved Small Businesses

    Tariffs May Create an Opportunity in Small-Business Cards

    May 15, 2025
    Using the Card “Beyond” Payments to find the Holy Grail

    Using the Card “Beyond” Payments to find the Holy Grail

    May 14, 2025
    Payments Modernization

    Playing Offense and Defense: Why Now Is the Time for Payments Modernization

    May 13, 2025
    Authorization Rates

    Boosting Revenue for Merchants by Optimizing Authorization Rates

    May 12, 2025
    Why Payment Orchestration is the key to international merchant growth

    Ensuring Payment Decisions Pay for Themselves

    May 9, 2025
    cross-border

    As Businesses Reevaluate Cross-Border Relationships, Financial Institutions Can Help

    May 8, 2025
    Nacha WEB Debit Account Validation Rule Verification Solution, Quovo ACH Payment

    The Brave New Future of the Disappearing Account

    May 7, 2025

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result