Unlocking the Future of Cross-Border Payments

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    Cross-Border Payments
    Mijail Popov

    Mijail Popov

    Director – EMEA Lead – Fintech and blockchain specialist

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    In the ever-evolving landscape of international payments and remittances, staying ahead of the curve is paramount, especially when it comes to global cross-border payments research, trends, and developments. Last week, our PCMI team had the privilege of participating in the Innovation in Payments and Remittances event held in the heart of London. This event served as a captivating window into the future of cross-border payments and remittances, offering a wealth of insights that are set to reshape the industry. In this article, we distill the key takeaways from this event, shedding light on the transformative trends and innovations that will influence how we move money across borders.

    Access the PCMI presentation at the Innovation in Payments and Remittances event. Click in the image below:

    #1 RTP Schemes are Emerging around the World

    It’s no news that PIX in Brazil and UPI in India — two real time payment or RTP schemes — have achieved remarkable success in their respective countries. As of September 2023, PIX reached an impressive milestone of 152 million daily transactions, boasting an 81% adoption rate among adults in Brazil. Since its launch in 2020, PIX has rapidly become a resounding success. Looking ahead, the Central Bank of Brazil is expected to introduce new features, including Pix Internacional, which will enable cross-border payments and is scheduled to launch in 2024.

    On the other side of the globe, UPI in India and Asia has been making substantial progress. With an impressive annual transaction volume growth averaging 85% over the past three years, UPI now boasts a user base of a staggering 300 million people. What’s even more remarkable is that UPI’s influence transcends India’s borders. Several other countries, including the UK, France, Malaysia, and the UAE, are increasingly embracing it for cross-border transactions. This highlights the pivotal role of real-time payment schemes (RTPs) in Asia, as they showcase significant potential for facilitating cross-border payments and remittances.

    Moreover, there have been noteworthy integrations within these schemes for international payments. For example, the integration of UPI with PayNow in Singapore and the linkage between PayNow and PromptPay in Thailand represent groundbreaking advancements in global real-time payment connectivity. Furthermore, PromptPay’s impressive reach, with over 60 million users and an 80% penetration rate among Thailand’s adult population, exemplifies the remarkable success achieved by Asia’s real-time payment schemes.

    #2 Africa Innovates Solutions for Remittances and Cross-Border Payments

    In 2022, the total remittances to Africa amounted to US$51 billion. Notably, the US-Nigeria corridor (US$5.7 billion) and the UK-Nigeria corridor (US$2.7 billion) emerged as the dominant channels in terms of transaction volume. However, according to data from the World Bank, Sub-Saharan Africa carries the unfortunate distinction of being the world’s most expensive region for sending money. This is exemplified by an average sending and receiving remittance fee of 8.5%, significantly higher than the global average of 6.25%. The primary driver behind this cost differential is the influence of foreign exchange (FX) currency rates. In many African countries, currencies experience lower trading activity, resulting in less favorable exchange rates. This, in turn, translates into a less favorable remittance experience for both senders and recipients in the region.

    Additionally, this discrepancy in costs serves as a barrier to remittances to intra-African countries, constituting a market worth US$19.4 billion (2022).1 In many instances, remittances must first be converted into US dollars and then further converted into the local currency to complete the transfer, adding significant costs to the process.

    In response to this challenge, the emergence of real-time payment infrastructure enabling instant account-to-account transactions offers a promising solution. The Pan African Payment and Settlement System (PAPSS), currently in its pilot phase, is a case in point. It aspires to save $5 billion in fees annually by facilitating immediate settlement among local African currencies. This innovative system eliminates the need for intermediary conversions into US dollars, pounds, or euros before funds can be transferred.

    At the same time, Africa is witnessing the rise of fintech and blockchain-based solutions as well, both of which are driven by the shared goal of reducing the cost of cross-border transfers. Local and international fintech companies are actively working towards making it more convenient for Africans to send and receive money. Eversend, Nala, AZA Finance, and Leatherback are notable examples of companies offering international transfers and multi-currency wallets among various other services. Additionally, blockchain-based solutions are making significant strides. Flutterwave and Stellar, for instance, have collaborated to launch two remittance corridors between Europe and Africa on the Stellar blockchain in 2021. This partnership aims to leverage the cost-efficient nature of the Stellar blockchain for digital asset transactions, further contributing to the transformation of the African remittances landscape.

    #3 Blockchain and AI May Play a Key Role in the Future of Cross-Border Payment Solutions

    Artificial Intelligence (AI) is rapidly emerging as a game-changer in the cross-border payments industry and use cases are taking place in a rapid way. Its transformative potential lies in its ability to streamline processes, enhance scalability, and significantly reduce operational costs. The implementation of AI allows industry professionals to focus on strategic tasks rather than being bogged down by routine and time-consuming operations. This shift enables teams to explore new opportunities, enhance services, and drive innovation.

    One exciting application of AI in payments is the deployment of chatbots to enhance customer service. These chatbots are designed to interact with customers and provide real-time support when transactions encounter issues. This innovation not only reduces the need for human intervention but also improves the speed and efficiency of issue resolution, thereby enhancing the customer experience.

    Forecasting and projecting arise as other interesting potential use cases to be improved by AI as well. AI’s ability to analyze vast datasets and identify trends makes it a powerful tool for predicting market dynamics. By harnessing AI’s capabilities, cross-border payment solution providers can proactively prepare for changing clients’ demands (like liquidity supply) and market conditions, ensuring they remain agile and competitive.

    On the other hand, blockchain technology has the potential to seamlessly integrate various payment rails and facilitate cross-border value transfers. Notably, cryptocurrencies already constitute 7% of the total remittances market. Bitcoin, for instance, while impractical for retail use due to its transaction costs, holds value for institutional transfers. Moreover, through integration with central bank digital currencies (CBDCs), cryptocurrency transactions could be processed using the same blockchain infrastructure in the future. This convergence of blockchain technology is poised to significantly impact the global payments landscape by streamlining international transactions, encompassing both cryptocurrencies and CBDCs.

    #4 Exploring Cross-Border Transaction Solutions with CBDCs

    While the progress of CBDC initiatives varies globally, several projects are actively pursuing cross-border capabilities. Notably, Project mBridge stands as the largest cross-border pilot test using CBDCs to date. This innovative project is piloting cross-border payments using digital currencies issued by the central banks of China, Hong Kong, Thailand, and the UAE. It’s worth mentioning that China’s leading state banks participated in this pilot, settling CBDCs on behalf of their corporate clients. The main goal of the mBridge project is to establish a unified platform for efficient and cost-effective digital payments, with the potential to boost global trade.

    Additionally, we also have the case of the Digital Dollar Project (DDP), a non-profit organization dedicated to advancing research on the potential benefits and challenges of a U.S. CBDC. The DDP recently conducted a pilot study in partnership with Western Union, evaluating the advantages of CBDCs in cross-border remittances using Distributed Ledger Technology (DLT). The study highlighted several key benefits, including cost optimization, enhanced customer experiences, and improved transparency and visibility.


    The landscape of cross-border money transfers and the remittances market is undergoing rapid transformation, primarily propelled by technological advancements. A shared driving force behind these changes is the pursuit of cost reduction, often referred to as the “race to the bottom.” New entrants in this sector, such as fintech companies, Real-Time Payment (RTP) systems, and blockchain-based solutions, are actively embracing digitalization as they target the cash-based market. With cash usage steadily declining in the world, there’s a growing potential for enhancing financial inclusion and digital adoption. It’s anticipated that by the end of this year, global digital remittances will achieve an estimated transaction volume of US$387 billion, as projected by the World Bank. This milestone signifies the first time in history that digital remittances will surpass 50% of the total volume.

    Significant opportunities exist for new digital-only entrants to establish a presence in regions characterized by low digital payment adoption and a heavy reliance on cash. Take countries like Morocco, Egypt, and Nepal, for instance, where fewer than 20% of the adult population have ever conducted digital transactions.2 An additional critical consideration for enabling digital payment solutions is the availability of mobile internet access, particularly for mobile wallets. As of 2022, only 40% of the adult population in sub-Saharan Africa had access to mobile internet services. This statistic underscores the substantial growth potential within this region for digital payment solutions.

    Although RTPs are rapidly gaining traction in regions like Asia, with ongoing improvements in cross-border capabilities, state-led cross-border RTP solutions in several African regions, including PAPSS, GIMAC Pay, and TCIB, are struggling to achieve significant adoption among the local population. Their development progress has been sluggish and somewhat unwieldy. In this context, it may offer an opportunity for card-based real-time push payment solutions such as VISA Direct and Mastercard Send to introduce their solutions in these regions, leveraging their respective global payment networks to facilitate transfers to card accounts.

    Finally, the potential of CBDCs for wholesale cross-border transactions is highly intriguing. Various central banks (like those involved in Project mBridge) are prioritizing this use case, showing a strong focus on it. This evolving trend may pose a substantial challenge to traditional international transfer systems such as SWIFT, where payments generally take 1-4 working days to be completed. It’s increasingly likely that we’ll witness a future where the majority of international transactions are executed using digital assets, particularly cryptocurrencies, and CBDCs, in a faster and more cost-efficient manner.

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    1. Remitscope ↩︎
    2. World Bank Findex Report 2021 ↩︎

    Mijail Popov
    Mijail Popov

    Mijail Popov is a Senior Analyst at PCMI, with nearly a decade of experience advising financial institutions, fintech companies, and startups on regulatory, business, and market insights.