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3 min read 29.04.2022 145
Ese Precious
Ese Precious
Fintech writer at AskWallet.io
Trends In Cross-Border Payments

Trends In Cross-Border Payments

Changing consumer needs, emerging market growth, and more financial inclusion are transforming the cross-border payments ecosystem. This year, according to experts, it may reach $156 trillion dollars. This fast-paced development accounts for new payments, new technologies, and new risks. Cross-border payments are always being improved and innovated to create more cost-effective, smooth, and frictionless services.

How Cross-border Payments Work

Monetary transfers between individuals or businesses in different countries are known as cross-border payments. To begin the payment, the money sender will often pick a front-end provider, such as a bank or a money transfer operator such as Wise. The money is subsequently delivered to the receiver via the media designated by the sender.

Typically, cross-border payments are settled through the correspondent banking network, which is used by most front-end providers. However, new back-end networks have recently emerged to streamline cross-border payments and facilitate connectivity across payment systems.

Trends in  Cross-border Payments in 2022

The international payments business is getting more competitive as the need for more transparency in payments grows, along with robust trade and international supply chain financing platforms and enhanced logistics.

Several trends are reshaping how wesend money abroad today and what it will look like in the future. The following are the most significant shifts.

Megatrends: new payments, new networks, and a trillion-dollar market ripe for disruption

Cheaper and faster solutions are being presented by new payment methods and networks that are also becoming popular. Payment service providers, digital banks, FinTech companies, close-looped networks, card networks, and other non-conventional players are helping to drive growth in cross-border transactions. The growth is estimated to increase by around 5% (CAGR). 

In 2022, total cross-border payment flow (worldwide) is expected to reach about $156 trillion as new entrants continue to find the size of the market appealing. With this total, the shares of the various forms of commercial transactions are expected to be as follows:

  • $150 trillion: Business-to-Business (B2B).
  • $2.8 trillion: Consumer-to-Business (C2B), including offline tourism expenditure and cross-border e-commerce.
  • $1.6 trillion:  Business-to-Consumer (B2C), including interest payments, wages and salaries.
  • $0.8 trillion: Consumer-to-Consumer (C2C), including remittance payments. 

Although many new players are trying to change the nature of the whole cross-border payments market, most of them are concentrating their efforts on low-value B2B, C2B, and B2C transactions. Driven by higher financial inclusion, increased trade with emerging markets, and changing consumer behaviour, these low-value levels of transactions create the highest disruption potentials but are not sufficiently offered by traditional payment service providers and banks at present.

Boost in global cross-border electronic commerce

More and more small and medium-sized enterprises (SMEs) are handling international business and contributing to the growth of electronic commerce (e-commerce). According to Juniper Research, globally, B2B cross-border payments would reach $35 trillion by 2022, up 30% from 2020. The fastest-growing segment of cross-border payments has been international e-commerce transactions.

Ecommerce sales in Latin America climbed by 25% from $68 billion in 2020 to $85 billion in 2021. While e-commerce sales in Russia, the United Kingdom, and the Philippines increased by more than 20% in 2021, the Indian e-commerce sector is predicted to rise to $111.4 billion by 2025, up from $46.2 billion in 2020.

More investment in FinTech companies

FinTech firms and products are becoming increasingly popular in the United States, Europe, Asia Pacific, the Middle East, and Africa. In 2021, FinTech investments totalled $91.5 billion worldwide. In the global FinTech business, American FinTech behemoths are drawing the greatest investment. In 2021, they contribute to approximately 80% of all investments in this area. 

Following the rising rate of digitalisation and client acceptance, several firms in the FinTech sector went public in 2021, and more are projected to do so in 2022. In July 2021, Wise, for example, was listed on the London Stock Exchange. Under the direct listing, it was valued at $11 billion, thus, becoming London's largest FinTech business by market capitalization.

Legacy financial institutions are fighting harder than ever

What began as an international payments space disruption has now spread to banking services. FinTech businesses, according to the narrative, are leveraging innovative financial technology and partnerships with neobanks to give traditional banks and legacy money transfer companies tough competition like never before. They are emphasising the shortcomings of traditional financial institutions in terms of digital user experiences and operational effectiveness. 

On the other hand, traditional banks have continued to be reliable and widely patronised. They continue to dominate the market for large commercial transactions and are embracing internet banking technology to stay ahead of the pack.

Many FinTech businesses, on the other hand, cannot function without the assistance of banks. The payment rails of the industry, such as clearing through the National Securities Clearing Corporation (NSCC) or the Automated Clearing House (ACH) of the United States, and money transfers through the Belgium-based Society for Worldwide Interbank Financial Telecommunication (SWIFT) systems, are still used by the back-end of many FinTech startups for cross-border payments.

Meanwhile, among other non-bank money transfer brands and financial services companies, Western Union has been in the cross-border payments space for more than 150 years. It remains a well-known brand all around the world. With a 130-currency portfolio and more than 150 million customers in over 200 countries today, regarding scale, channels, and income, it still claims to be the largest digital peer-to-peer payments network in the cross-border payments industry.  The concept of improving products and services through daily innovations that meet changing customer needs has helped the company to remain an industry leader.

More financial inclusion and growth of digital remittances

The move from cash to digital payments is accelerating, a trend that is becoming more prominent in emerging economies as adult mobile phone ownership is increasing. By boosting access to banking services and digital payment alternatives, this movement is fostering financial inclusion. It continues to increase the number of remittances sent by migrants to their relatives back home.

Digital channels are gaining popularity as a medium for remittance payments as a result of increased digitalisation and smartphone penetration. New digital remittance payment methods such as Paysend and TransferGo offer cross-border payment services that are quicker, cheaper, and more transparent than traditional institutions. Traditional money transfer companies such as Western Union and MoneyGram are now under pressure from these new arrivals in the market. Such old service providers may have a big physical network, but sender and receiver costs are more expensive than those of modern mobile alternatives.

Growth of e-wallets

Basically, e-wallets store electronic cards and ease payments. The number of e-wallets for individuals and businesses to make fast and convenient cross-border transfers without needing to send physical cash is increasing. By 2025, e-wallet users are expected to be not less than 4.4 billion people (Juniper Research), thanks to the COVID-19 pandemic for speedily changing how we shop and getting more people to embrace digital technology. Besides, revenue from mobile payment applications is predicted to reach $1,639.50 trillion by the end of 2022, up from $550 trillion in 2015.

The top e-wallets for international payments are the following:







Blockchain technology adoption by more financial institutions

One of the significant trends in cross-border payments is the increasing adoption of cryptocurrency and blockchain technology by e-wallet providers, FinTech companies, neobanks, and traditional banks. They are using blockchain technology to:

  • create more efficient payment processing;
  • produce decentralised ledgers;
  • deliver faster and more convenient payments;
  • reduce the cost of international transfers;
  • ease digital and fiat currency conversions;
  • keep safe financial records;
  • allow anonymous payments;
  • tokenize traditional securities like bonds and stocks;
  • enable more secure borrowing, and a lot more.

The following are the best e-wallets and payment systems that use blockchain technology and work with cryptocurrency:








OWNR Wallet


Introduction of Central Bank digital currencies

Inspired and threatened by blockchain adoption and cryptocurrency development, Central Bank Digital Currency (CBDC) is a digital form of legal tender issued and controlled by the central bank of a country. If the technology is used, CBDCs will make cross-border payments quicker, more cost-effective, and improve interoperability across online payment systems and numerous financial institutions.

China became the first major country to test digital money, known as e-CNY (or digital renminbi), on a broad scale in 2019. Presently, more than 80 countries are studying the idea of creating their own CBDCs to boost cross-border commerce.

Nine nations have completely implemented a central bank digital currency.  Nigeria, with its e-Naira, is the most recent country to establish a CBDC - the first in Africa. We anticipate that additional countries will launch their CBDCs soon. As technology evolves and legal constraints are in place, we should expect exponential growth in digital currency payments.

More Payments-as-a-Service (PaaS) platforms

Payments-as-a-Service (PaaS) is the utilisation of cutting-edge all-inclusive cloud-based platforms to deliver specialised services. Payment clearing, card issuance, international payment processing, the development of e-commerce gateways, and other services are examples of these services.

According to Grand View Research, from 2020, worldwide, the Payments-as-a-Service market is estimated to grow at a CAGR of approximately 17% and reach $25.7 billion by 2027.  

PaaS platforms can potentially upgrade cross-border payments. With PaaS, the process of developing payment systems and building payment networks with banks is now way easier for businesses. 

Examples of payment systems that provide PaaS include:





Starling Bank

Increase in Banking-as-a-Service (BaaS) platforms

Banking as a Service (abbreviated BaaS) refers to an end-to-end method that allows fintech businesses and other third-party organisations to integrate with bank digital systems using application programming interfaces (APIs). This allows nonbanks to provide banking services to their consumers. Examples of the services on offer are mobile bank accounts, debit cards, loans, and instalment payments (Buy Now, Pay Later). It also makes it possible to send low-cost digital remittances and other cross-border payments.

Examples of payment systems that provide BaaS:

Fidor Bank






Clearpay (Afterpay)

The explosion of open banking platforms

The architecture that enables BaaS is open banking. It establishes the guidelines for third-party access to and processing of consumer financial data. The primary distinction between open banking and BaaS is in how APIs are used: whereas APIs are used in open banking to access customer data, in BaaS, they are used to access banking services.

Open banking gives users control over their data by allowing individuals to safely exchange their data and information. It is becoming more popular in cross-border payments since it promotes competition in the financial services industry.

Keeping Cross-border Payments Safe

The top concerns about establishing safe cross-border payments have been around payment fraud and data security. Many financial services companies in the UK and US have invested so much in ensuring that their payment systems are safe for use domestically and internationally, as the case may be. However, having to keep in mind several regulatory requirements when planning security programmes has been a challenge for them.  

Capturing data from the whole end-to-end transaction at the network level and leveraging the raw, unfiltered network traffic for anomaly detection is one of the finest approaches to fraud detection. Individual transactions can be denied at the field level when suspicious or fraudulent transactions are discovered, based on some factors, letting lots of traffic through while blocking the fraudsters.

Final Thoughts

Following the recent developments in cross-border payments, it is easy to think that cash does not matter anymore today. Well, it still does matter. The need to send cash remains a key driver of the trends in international money transfers, whether through traditional or modern digital methods.

As the various players in the financial and banking industries are leveraging modern technology to create low-cost, fast, innovative, custom, and reliable products and services, consumers' needs should be expected to change with time. Therefore, joint efforts should be placed to create sustainable systems and products for both back-end and front-end cross-border payment solutions.