Cross-border payments are becoming increasingly important to international economies, with around 63% of global consumers using international real-time payments (RTPs) services to send money to family and friends, while 51% use them only to pay for goods and services.

That’s according to the 2024 Financial Services Consumer Survey conducted by GlobalData, which says the G20 roadmap for enhanced cross-border payments aims to improve the speed, access, transparency, and cost of international payments by 2030. In its most recent update in October 2023, the Financial Stability Board reports there is a shortfall against G20 targets in the proportion of retail services that make funds available to the consumer in an hour (42% vs target of 75%) and in one business day (76% vs target of 100%).

Benjamin Hatton, Banking and Payments Analyst at GlobalData, said: “Real-time payments have become commonplace among domestic payment services. Not only are they considered superior to traditional methods because of their speed, but these services are typically available 24/7, reduce transaction costs, and ease liquidity management for businesses. They also represent the next major step for cross-border payment services, as the volume of cross-border payments also ramps up over the coming years.”

GlobalData estimates that the total volume of cross-border transactions in Europe alone will increase by 58% between 2023 and 2028. A number of international initiatives, such as ‘Immediate Cross-Border Payments’ developed by The Clearing House in the US, EBA Clearing in Europe, and SWIFT, to create a 24/7 USD-EUR payments corridor, are in development to improve cross-border payments.

Hatton continued: “As these developments and initiatives continue, the tradeoff between the ease of creating multilateral channels and the scalability of a truly global system will get harder to overcome. The failure of pan-Nordic initiative P27 illustrates the challenge of collaborating on and executing the vision of a cross-border settlement scheme across jurisdictions. The push for digitalization of consumer payment methods will be key in driving down costs and improving transfer speeds.

“Simplicity and speed of the transfer process is the most important factors for consumers when choosing a cross-border payment provider. While progress has been tangible, there is clearly scope to improve these measures and further reap the rewards from delivering these services.”

GlobalData’s 2024 Financial Services Consumer Survey was conducted in Q2 2024 and had 61,000 respondents across 41 countries.

Photo by Clay Banks on Unsplash

The global payments industry witnessed an exceptional 2022, despite the challenges posed by expansionary monetary policy, geopolitical uncertainties, pandemic-related supply chain disruptions, and a macroeconomic environment with heightened inflation and increased energy costs.

That’s according to GlobalData, which says the top 20 public payment companies experienced a 15.5% increase in their top-line performance, reaching a total of $228 billion.

The US payment companies dominated the list with the top four – American Express, Visa, PayPal, and Mastercard – accounting for 58.5% of the aggregate revenue of the top 20. Driven by an increase in global payment volume, the big four grew by more than 10%.

Other companies in the top 20 list that recorded impressive top-line growth include Adyen, WAG Payment Solutions (Eurowag), WEX, and Fleetcor Technologies. Each grew by more than 20%. Eurowag and Nuvei are the new entrants replacing Lakala Payment and Evertec.

Murthy Grandhi, Company Profiles Analyst at GlobalData, said: “Adyen’s growth can be attributed to its remarkable progress of processed volumes that surpassed half a trillion, reaching EUR767.5 billion in 2022, reporting a year-on-year (YoY) growth rate of 49% and a CAGR of 48.2% over the past five years. Of these volumes, point-of-sale (POS) accounted for 15% translating to EUR115.1 billion. The company’s revenue expanded due to a greater increase in settlement and processing fees.”

Integrated payments and mobility platform player Eurowag’s 27.9% revenue growth was a result of higher energy prices and growing scale of payment solutions.

WEX reported robust revenue growth of 27% owing to 34.6% rise in payment processing revenue from Fleet solutions segment on the back of higher domestic fuel prices and volume growth in North American fleet and over-the-road businesses.

Fleetcor Technologies’ 20.9% growth in revenue was due to 14% rise in fleet revenue, driven by increase in transaction volumes and new sales growth and positive impact of the macroeconomic environment.

New entrant, Nuvei registered 16.4% rise in revenue primarily due to organic growth driven by higher e-commerce volume.

Samsung Card reported a dip in revenue triggered by a depreciation in currency value. Cielo’s 4.4% drop in revenue was due to the impact of the sale of MerchantE and M4U. Block (formerly Square) also reported a marginal drop in revenue owing to decline in the market price of bitcoin.

Grandhi concluded: “The recent disruptions in the economic, social, and technological landscape have created promising opportunities for businesses to explore and expand. These disruptions forced companies to explore new channels, enlarge customer reach, and seek new business prospects. In the near future, there can be spurt in niche areas such as social and live commerce, blockchain technology, real-time payments, open banking, adoption of digital currencies, biometric authentication for payment transactions, and the metaverse can emerge as a new commerce platform.”

Image by Republica from Pixabay