The Growing Importance of Cross-Border Payments in Global Economies

Cross-border payments are gaining significance in international economies. According to the 2024 Financial Services Consumer Survey by GlobalData, around 63% of global consumers use international real-time payments (RTPs) to send money to family and friends, while 51% use them to pay for goods and services.

The G20 has laid out a roadmap aimed at enhancing cross-border payments by 2030, focusing on improving speed, access, transparency, and cost. However, the Financial Stability Board reported in October 2023 that current performance is falling short of G20 targets, particularly in the proportion of retail services making funds available within an hour (42% against a 75% target) and within one business day (76% against a 100% target).

Benjamin Hatton, a Banking and Payments Analyst at GlobalData, noted that real-time payments have become standard for domestic transactions due to their speed, 24/7 availability, reduced transaction costs, and easier liquidity management for businesses. Hatton highlighted that as cross-border payment volumes increase, these benefits are becoming crucial for international transactions as well. GlobalData predicts a 58% increase in cross-border transaction volume in Europe alone from 2023 to 2028.

Several international initiatives are being developed to enhance cross-border payments, including ‘Immediate Cross-Border Payments’ by The Clearing House in the US, EBA Clearing in Europe, and SWIFT, aiming to create a 24/7 USD-EUR payment corridor. Hatton observed that these initiatives face challenges, particularly in balancing the creation of multilateral channels with the scalability of a global system, as demonstrated by the failure of the pan-Nordic initiative P27. The push towards digitalization of consumer payment methods is seen as vital for reducing costs and improving transfer speeds.

Hatton emphasized that consumers prioritize the simplicity and speed of the transfer process when selecting a cross-border payment provider. While significant progress has been made, there is still room for improvement to fully capitalize on the benefits of these services.

The 2024 Financial Services Consumer Survey by GlobalData, conducted in Q2 2024, included 61,000 respondents across 41 countries. GlobalData supports over 4,000 of the world’s largest companies, including more than 70% of FTSE 100 and 60% of Fortune 100 companies.

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