PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

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

Steve Murphy by Steve Murphy
October 18, 2021
in Analysts Coverage, Cross-border Payments
0
digital yuan Instant Cross-Border Payments Banks

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

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

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

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

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Mercator Advisory Group analysts and industry professionals.

    Must Reads

    live shopping, ebay

    Q&A: eBay Exec on Live Shopping and the Future of Payments

    March 24, 2023
    AI and Biometrics in Regulatory Compliance in Finance

    The Importance of AI and Biometrics in Regulatory Compliance in Finance

    March 23, 2023
    Everyone Benefits from the Real-Time Payment Networks  

    Everyone Benefits from the Real-Time Payment Networks  

    March 22, 2023
    commercial payments

    Optimizing Commercial Payments in the Digital Age

    March 21, 2023
    cross-border payments

    Cross-Border Payments: Fighting
    E-Commerce Fraud Using Data

    March 20, 2023
    fraud, ChatGPT-4

    How to Fight Fraud While Still Enabling a Great Online Customer Experience

    March 17, 2023
    RTP

    Financial Institutions Without an RTP Strategy Risk Being Left Behind

    March 16, 2023
    visa chargeback

    New Visa Chargeback Guidelines Will Be a Game Changer

    March 15, 2023

    Linkedin-in Twitter

    Advertise With Us | About Us | Terms of Use | Privacy Policy | Subscribe
    ©2023 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    Menu
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • Recent News
    • Resources
    Menu
    • Industry Opinions
    • Recent News
    • Resources
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result

      Register to download the Payoneer eBook: