Cross-border payments - statistics & facts
Cross-border payment transactions became increasingly common, as e-commerce grew and pandemic restrictions were lifted. Estimates are that the global share of cross-border card spending was roughly six percent worldwide. There were significant differences between regions, though. What are the main trends that financial service providers need to keep an eye out for in 2025 regarding cross-border payents?
International money movement has become a big focus in the payments industry, as it touches international trade, cross-border e-commerce, and even economic activity and financial inclusion. Financial service providers would have to invest in a seemless client experience, integration within existing payment rails, and competitive pricing. Which digital payments technology could provide all this, is not entirely clear yet.
How to combat transaction costs?
B2B cross-border payments and retail cross-border payments are significantly different from each other. The market size of B2B cross-border payments outweighs payments initiated by consumers, as the first involves high-value transactions. Retail transactions contain lower-value transactions. Nevertheless, both segments have to deal with high transaction costs and difficult processes. Nearly three out of 10 clients of banks and fintechs ranked cross-border efficiency as a pain point when paying. The G20 aims to reduce both cross-border retail payments costs and remittance costs - to one percent by 2027 and to three percent by 2030, respectively. However, the average costs of remittances are not yet close to this.The issues of interoperability and regulation
Cross-border transactions are also affected by global fragmentation, as payment standards vary significantly between countries. Supply chain professionals, for example, listed聽differences in regulatory compliance at customs as a significant challenge. This translates into different local payment habits or different payment rails used, which may or may not work well together from one country to the next. Technological barriers or limited access to technology can also complicate transactions. The share of the population without access to bank accounts, for example, varies significantly across the world. Finally, variable foreign exchange rates are an additional factor of uncertainty for businesses.Alternative solutions on the payment rail
Financial service providers increasingly look towards technology to help overcome these hurdles. There are several examples. Central banks hope the development of聽interbank wholesale Central Bank Digital Currencies (CBDCs) or regional solutions could optimize clearing between countries. Companies test stablecoins - cryptocurrencies pegged to real-world assets like the U.S. dollar - in payments. PayPal's PYUSD stablecoin settles international transfers on Xoom, for example, while Visa is testing USDC in settlements. Others, meanwhile, try to become more efficient: Wise's cross-border transactions were impacted by strategic partnerships with Morgan Stanley or Standard Chartered.International money movement has become a big focus in the payments industry, as it touches international trade, cross-border e-commerce, and even economic activity and financial inclusion. Financial service providers would have to invest in a seemless client experience, integration within existing payment rails, and competitive pricing. Which digital payments technology could provide all this, is not entirely clear yet.
