3 hours Ago By Yoo Mi-ja
Real-time cross-border payments are experiencing significant growth as global consumers increasingly rely on them for seamless international transactions. According to GlobalData's 2024 Financial Services Consumer Survey, approximately 63% of global consumers use these services to send money to family and friends, while 51% utilize them for purchasing goods and services. This trend underscores the growing importance of real-time payments in the global economy.
Despite the progress, challenges persist in meeting the G20 targets for speed and efficiency across key markets. The Financial Stability Board's October 2023 update revealed a shortfall against G20 targets, with only 42% of retail services making funds available to consumers within an hour (compared to the 75% target) and 76% within one business day (versus the 100% target). The future of cross-border payments looks promising, with GlobalData's Payment Instrument Analytics projecting a 58% increase in the total volume of cross-border transactions in Europe alone between 2023 and 2028.
To explore these developments further, GlobalData is hosting a virtual conference, "eCommerce in Financial Services," which will delve into impactful trends such as embedded finance, cybersecurity, and cross-border payments. Stephen Walker, Lead Banking and Payments Analyst at GlobalData, highlights the advantages of real-time payments over traditional methods, citing their speed, 24/7 availability, reduced transaction costs, and improved business liquidity management. He also notes that real-time payments represent the next major step for cross-border payment services.
Several international initiatives are underway to enhance cross-border payments, including the "Immediate Cross-Border Payments" project developed by The Clearing House (US), EBA Clearing (Europe), and SWIFT. This initiative aims to establish a 24/7 USD-EUR payments corridor to improve international transactions. However, challenges remain in creating a truly global system.
Walker points out the difficulty in balancing the ease of creating multilateral channels with the scalability of a worldwide system, citing the failure of the pan-Nordic initiative P27 as an example of the complexities involved in cross-jurisdictional collaboration. Digitalizing consumer payment methods will be crucial in reducing costs and improving transfer speeds. Walker emphasizes that simplicity and speed are the most critical factors for consumers when choosing a cross-border payment provider.
While progress has been made, there is still room for improvement to capitalize on the potential of real-time cross-border payment services fully..
