Status of Cross Border Payments

L E
M P
S A
BANKING & PAYMENTS June 2023
Report code: GDFS0447IA
The Status of Cross-border

Payments: 2023
The Status of Cross-border Payments: 2023
Table of Contents
1. Executive Summary....................................................................................................................................................... 4
1.1 Market overview ................................................................................................................................................... 4
1.2 Key findings ........................................................................................................................................................... 5
1.3 Critical success factors .......................................................................................................................................... 5
2. Card-based Payments ................................................................................................................................................... 6

2.1 Tourism and ecommerce ....................................................................................................................................... 6
3. Correspondent Banking ................................................................................................................................................ 7

3.1 SWIFT .................................................................................................................................................................... 7
- Introduction .......................................................................................................................................................... 7
- SWIFT gpi .............................................................................................................................................................. 7
L E
4. Payment Service Providers ........................................................................................................................................... 9
4.1 Market overview ................................................................................................................................................... 9
P
4.2 Case study: Wise’s innovative cross-border solutions ........................................................................................... 9
- Introduction .......................................................................................................................................................... 9
- Background ........................................................................................................................................................... 9
M
- Innovation: Open banking and APIs ...................................................................................................................... 9
- Market impact ...................................................................................................................................................... 9
A
5. Blockchain ................................................................................................................................................................... 11
S
5.1 Market overview ................................................................................................................................................. 11
5.2 Central Bank Digital Currencies........................................................................................................................... 12
5.3 Stablecoins .......................................................................................................................................................... 14
5.4 Case study: BitPesa ............................................................................................................................................. 15
6. Real-time Settlement .................................................................................................................................................. 16

6.1 Market overview ................................................................................................................................................. 16
- SEPA .................................................................................................................................................................... 16
- P27 ...................................................................................................................................................................... 17
- Nexus .................................................................................................................................................................. 19
- Pan-African Payment and Settlement System .................................................................................................... 19
6.2 Real-time payment linkages................................................................................................................................ 20
7. Appendix ..................................................................................................................................................................... 21
7.1 Abbreviations, acronyms, and initialisms ........................................................................................................... 21
7.2 Secondary sources ............................................................................................................................................... 21
7.3 Further reading ................................................................................................................................................... 22
About GlobalData ............................................................................................................................................................... 24
Contact Us........................................................................................................................................................................... 25
www.globaldata.com 2
List of Figures
Figure 1: Factors most valued when making P2P payments 4
Figure 2: Total revenue, Wise 10
Figure 3: Countries with ongoing CBDC projects 13
Figure 4: Country count by cross-border CBDC progress 13
Figure 5: PayPal is the preferred method of cross-border payment in SEPA nations 17
Figure 6: Nordic countries opt for Western Union and PayPal cross-border payments 18
List of Tables
Table 1: Benefits of blockchain: Why is usage increasing? 11
Table 2: Barriers to blockchain adoption 12
L E
M P
S A
1. Executive Summary
1.1 Market overview
Cross-border payments are an essential aspect of global trade and commerce, allowing businesses and individuals to
transfer funds across different countries and currencies. Today, most cross-border payments are conducted through
SWIFT (the Society for Worldwide Interbank Financial Telecommunication), which is a global messaging network that
facilitates the exchange of payment messages between banks and financial institutions.
Purchase the report to get full access
Figure 1: Factors most valued when making P2P payments
L E
M P
S A
Source: GlobalData’s P2P Payments Analytics 2022
1.2 Key findings

• RTP systems are gaining popularity in the cross-border payments industry with the emergence of new players such
as the Single Euro Payments Area (SEPA), P27, and Project Nexus. This trend is driven by the need for faster and
more efficient payment processes, which traditional systems have struggled to provide.
1.3 Critical success factors

Integration with multiple payment channels: A successful cross-border payments system should be able to integrate
with multiple payment channels such as mobile banking apps, blockchain, CBDCs, and RTP systems to ensure flexibility
and scalability.
Compliance with regulatory requirements: A cross-border payments system should comply with regulatory
requirements in different jurisdictions to avoid legal and reputational risks. This includes complying with anti-money
laundering (AML) and know your customer regulations.
2. Card-based Payments
2.1 Tourism and ecommerce
The COVID-19 pandemic and Russia-Ukraine war have led to significant disruptions to B2C ecommerce, affecting every
chain of delivery from the sourcing of products to the delivery itself. As such, the global economy is expected to shrink.
While the pandemic led to domestic changes in payment preferences as more merchants and customers switched to
contactless payments, it has also changed the type of customers utilizing ecommerce rails; for example, the elderly.
Card-based cross-border transactions play an important role in the global economy, driving cross-border trade,
enabling global ecommerce, and facilitating growth in the global tourism industry. According to GlobalData’s Payment
Cards Analytics, the proportion of total card payments in Europe that were cross-border increased from XX% to XX%
between 2006 and 2021 and is expected to rise to XX% by 2026.
E
3. Correspondent Banking
P L
Correspondent banking is a system used for cross-border payments in which banks act as intermediaries for other
banks. This allows banks to facilitate transactions between their customers and customers of other banks, even if those
banks are in different countries. The correspondent banking network is a vital component of the global financial system
M
as it enables banks to provide services to customers in other countries and facilitates international trade and
commerce.
A
3.1 SWIFT
S
- Introduction
SWIFT is one of the most important players in the correspondent banking network. Established in 1973, SWIFT provides
a secure and reliable messaging platform that allows banks to communicate with each other and exchange financial
information, such as payment instructions. According to SWIFT, the network facilitated an average of XX million
messages per day in 2022.
The popularity of SWIFT is due to its reliability, security, and wide reach. SWIFT has a global network of over XX financial
institutions in more than 200 countries and territories, making it one of the most comprehensive correspondent
banking networks in the world.
- SWIFT gpi
SWIFT’s global payments innovation (gpi) initiative is a payment system that aims to provide faster, more transparent,
and more efficient cross-border payments. The system was launched in 2017 by SWIFT as a response to the growing
demand for faster and more transparent cross-border payments. SWIFT gpi has been adopted by banks and financial
institutions around the world, and it is quickly becoming the standard for cross-border payments. As of 2021, over XX
banks and financial institutions have signed up to use the system, and over $XX billion in payments are processed
through SWIFT gpi every day.
4. Payment Service Providers

4.1 Market overview
Third-party processors are companies that allow merchants to process credit card transactions without having a
merchant account of their own, with merchants paying a fee for the service. This can be an attractive option for
merchants that do not wish to incur the cost and complexity of setting up their own merchant account.
4.2 Case study: Wise’s innovative cross-border solutions

- Introduction
E
Cross-border payments have long been a pain point for businesses and consumers alike, with high fees and long
L
processing times being the norm. However, a new player in the market, Wise, is looking to change that through the use
P
of innovative solutions such as open banking and application programming interfaces (API). This case study will examine
Wise's approach to cross-border payments, its impact on the market, and the potential for future growth.
- Background
M
Wise was founded in 2011 with the goal of making cross-border payments faster and more affordable for consumers
A
and businesses. The company operates on a peer-to-peer model, connecting individuals and businesses who need to
send money to other countries with those who are willing to exchange it at a more favorable exchange rate.
S
- Innovation: Open banking and APIs
One of the key ways in which Wise is able to offer a more efficient cross-border service is through the use of open
banking and APIs. Open banking allows Wise to connect directly to a user's bank account, bypassing the need for
traditional correspondent banking networks. This means that funds can be transferred directly between accounts,
reducing the number of intermediaries involved and resulting in faster processing times.
- Market impact
Wise’s approach to cross-border payments has had a significant impact on the market. The company’s focus on
transparency, with clear and upfront fees, has helped to raise the bar for other players in the industry. Additionally, by
offering a more efficient and affordable service, Wise has been able to attract a large number of customers.
Figure 2: Total revenue, Wise
L E
P
Source: Wise
M
5. Blockchain
S A
5.1 Market overview
Blockchain technology has the potential to revolutionize cross-border payments by offering a secure and efficient
alternative to traditional methods. Blockchain allows for the creation of a decentralized ledger that records transactions
in a transparent and immutable manner, enabling the transfer of value without the need for intermediaries. This has
the potential to significantly reduce the cost and complexity of cross-border payments, making them more accessible
and attractive to businesses and individuals.
Table 1: Benefits of blockchain: Why is usage increasing?

Reduced costs
Increased security
E
Table 2: Barriers to blockchain adoption
L
Bank-side difficulties
M P
A
Regulation
S
5.2 Central Bank Digital Currencies
The use of CBDCs for cross-border payments has been gaining significant attention as a potential solution to address
the current inefficiencies in the system by eliminating intermediaries between the central bank and the end consumer.
Multiple central banks, including the Bank of Japan (BOJ), the European Central Bank (ECB), and the Federal Reserve
(Fed), have been actively researching and exploring the use of CBDCs for cross-border payments. The BOJ has
completed the first phase of its CBDC Proof of Concept testing and launched a pilot program in April. The ECB and the
Fed have also been conducting research on CBDCs. The Boston Fed launched a CBDC research project in conjunction
with the Massachusetts Institute of Technology to test the technical feasibility of a CBDC, with the project concluding in
late 2022.
Figure 3: Countries with ongoing CBDC projects
L E
Source: CBDCTracker.org
P
Figure 4: Country count by cross-border CBDC progress
A M
S
Source: Atlantic Council
5.3 Stablecoins
Stablecoins are a form of digital currency that are pegged to the value of a traditional asset, such as the US dollar, and
designed to minimize volatility in their value. They are typically implemented as smart contracts on a blockchain
network and can be used in a variety of different applications, including cross-border payments.
The use of stablecoins for cross-border payments has been gaining popularity in recent years, as they offer a number of
advantages over traditional methods. One of the main advantages is the ability for near-instant, real-time settlements.
Traditional correspondent banking systems can take several days to settle cross-border transactions, whereas
stablecoins can be transferred and settled in a matter of minutes or even seconds.
5.4 Case study: BitPesa

BitPesa is a digital foreign exchange and payment platform based in Kenya that utilizes blockchain technology to
facilitate cross-border payments for businesses and individuals in Africa, Europe, and Asia. The company was founded
in 2013 by Elizabeth Rossiello and initially targeted the niche of simplifying remittance payments for Kenyans in the UK,
but it has since expanded its customer base to include businesses and individuals in need of low-cost, reliable cross-
border payments.
E
L
6. Real-time Settlement
P
6.1 Market overview
M
Real-time settlement rails are systems that allow for the rapid and efficient transfer of funds across borders, enabling
A
the near-instantaneous settlement of cross-border payments. These systems can significantly reduce the cost and
complexity of cross-border payments, making them more accessible and attractive to businesses and individuals.
S
One example of a real-time settlement rail is SEPA in Europe. SEPA is a network of banks and financial institutions that
facilitates the rapid and efficient transfer of euros between countries within the European Union.
- SEPA
SEPA is a payment integration initiative established by the EU to simplify and standardize euro-denominated cross-
border payments. The SEPA Instant Credit Transfer (SCT Inst) scheme is a pan-European instant payment solution that
enables the execution of domestic and cross-border euro credit transfers throughout the SEPA zone. SCT Inst is built on
the foundation of the existing SEPA Credit Transfer scheme and was launched in November 2017 by the European
Payments Council (EPC) to avoid fragmentation in the SEPA payment landscape and provide a real-time, borderless
payment solution that adds clarity, consistency, and efficiency.
Figure 5: PayPal is the preferred method of cross-border payment in SEPA nations
L E
P
Source: GlobalData’s P2P Payments Analytics 2022
M
Similar analysis has been provided for the following:
A
• P27
S
• Nexus
• Pan-African Payment and Settlement System
6.2 Real-time payment linkages

RTP linkages for cross-border payments have become increasingly important in Asia, where the demand for faster and
more efficient payment systems is on the rise. One example of such a system is the cross-border QR (CBQR) payment
system launched in 2019 by the Bank of Thailand in collaboration with Indonesia and Malaysia. The CBQR system aims
to facilitate cross-border payments by allowing users to make payments using QR codes, which can be scanned at
participating merchants. The system enables customers to make payments in their home currency, and transactions are
settled in real time using the participating central banks' real-time gross settlement systems.
7. Appendix
7.1 Abbreviations, acronyms, and initialisms
AML – anti-money laundering
API – application programming interface
BIS – Bank for International Settlements
BOJ – Bank of Japan
CBDC – Central Bank Digital Currency
CBQR – cross-border QR
DLT – distributed ledger technology
E
ECB – European Central Bank
L
EPC – European Payments Council
P
Fed – Federal Reserve
IPS – instant payment system
M
MSB – money service business
A
PAPSS – Pan-African Payment and Settlement System
S
RTP – real-time payment
SCT Inst – SEPA Instant Credit Transfer
SEPA – Single Euro Payments Area
TIPS – TARGET Instant Payment Settlement
7.2 Secondary sources

Arf (2023) Company website [accessed June 2023]
Atlantic Council (2023) Central Bank Digital Currency Tracker [accessed June 2023]
Bank Indonesia (2021) INDONESIA AND THAILAND LAUNCH CROSS-BORDER QR PAYMENT LINKAGE [accessed June
2023]
Bank of Thailand (2021) Joint Press Release Launch of the Cross-Border QR Payment Linkage between Malaysia and
Thailand [accessed June 2023]
BIS (2023) New correspondent banking data – the decline continues [accessed June 2023]
BIS (2023) Nexus overview [accessed June 2023]
Coin Telegraph (2023) USDT market share jumps amid economic uncertainty, but USDC shrinks [accessed June 2023]
ECB (2019) Third phase of Stella project completed [accessed June 2023]
ECB (2023) Single Euro Payments Area [accessed June 2023]
ECB (2023) What is TARGET Instant Payment Settlement (TIPS)? [accessed June 2023]
Federal Reserve Bank of Boston (2022) Boston Fed, MIT complete research project into feasibility of a central bank
digital currency [accessed June 2023]
Fintech Futures (2023) P27 Nordic payments withdraws clearing licence application leaving the projects future unclear
[accessed June 2023]
GBG (2023) BitPesa and GBG: the evolution of payments in Africa [accessed June 2023]
HSBC (2019) SEPA Instant Credit Transfer Factsheet [accessed June 2023]
Juniper Research (2019) BLOCKCHAIN-BASED CROSS-BORDER B2B TRANSACTIONS TO SKYROCKET TO $4.4 TRILLION BY
2024 [accessed June 2023]
Ledger Insights (2019) R3 and Infosys complete blockchain trade finance trial [accessed June 2023]
Oracle (2022) Nexus, the next biggest disruptor for cross-border remittances [accessed June 2023]
PAPSS (2022) Worldwide: Launch Of The Pan African Payment And Settlement System – A New Dawn For Cross-Border
E
Financial Transactions In Africa in Mondaq [accessed June 2023]
L
PAPSS (2023) About us [accessed June 2023]
P
ScienceSoft (2023) Cross-Border Payments on Blockchain in 2023 [accessed June 2023]
SWIFT (2023) Compliance [accessed June 2023]
M
SWIFT (2023) Our solutions [accessed June 2023]
A
SWIFT (2023) Swift FIN Traffic & Figures [accessed June 2023]
S
Venture Capital Journey (2023) CitPesa CEO: Cryptocurrency regulations could parallel internet laws [accessed June
2023]
Wise (2023) Wise [accessed June 2023]
Wise (2023) Wise unveils new look as it reaches 16 million customers served worldwide and continues global expansion
[accessed June 2023]
7.3 Further reading

GlobalData, Competitor Profile: PayPal 2023, June 2023
GlobalData, Turkiye Cards and Payments: Opportunities and Risks to 2027, June 2023
GlobalData, Nigeria Cards and Payments: Opportunities and Risk to 2026, June 2023
GlobalData, Competitor Profile: Samsung Pay 2023, June 2023
GlobalData, Competitor Profile: Affirm 2023, June 2023
GlobalData, Competitor Profile: Adyen 2023, May 2023
GlobalData, Morocco Cards and Payments: Opportunities and Risks to 2026, May 2023
GlobalData, Indonesia Cards and Payments: Opportunities and Risk to 2026, May 2023
GlobalData, Competitor Profile: Paytm 2023, May 2023
GlobalData, Competitor Profile: Ideal 2023, May 2023
GlobalData, Competitor Profile: M-PESA 2023, May 2023
GlobalData, Brazil Cards and Payments: Opportunities and Risks to 2026, May 2023
GlobalData, Kenya Cards and Payments: Opportunities and Risks to 2026, May 2023
GlobalData, Competitor Profile: Stripe 2023, May 2023
GlobalData, Netherlands Cards and Payments: Opportunities and Risks to 2026, April 2023
GlobalData, Sweden Cards and Payments: Opportunities and Risks to 2026, April 2023
L E
M P
S A
About GlobalData
GlobalData is a leading provider of data, analytics, and insights on the world's largest industries.
In an increasingly fast-moving, complex, and uncertain world, it has never been harder for organizations and decision
makers to predict and navigate the future. This is why GlobalData’s mission is to help our clients to decode the future
and profit from faster, more informed decisions. As a leading information services company, thousands of clients rely
on GlobalData for trusted, timely, and actionable intelligence. Our solutions are designed to provide a daily edge to
professionals within corporations, financial institutions, professional services, and government agencies.
| Unique Data
We continuously update and enrich 50+ terabytes of unique data to provide an unbiased, authoritative view of the
sectors, markets, and companies offering growth opportunities across the world's largest industries.
| Expert Analysis
We leverage the collective expertise of over 2,000 in-house industry analysts, data scientists, and journalists, as well as
a global community of industry professionals, to provide decision-makers with timely, actionable insight.
| Innovative Solutions
We help you work smarter and faster by giving you access to powerful analytics and customizable workflow tools
tailored to your role, alongside direct access to our expert community of analysts.
| One Platform
We have a single taxonomy across all of our data assets and integrate our capabilities into a single platform – giving you
easy access to a complete, dynamic, and comparable view of the world’s largest industries.
Contact Us
If you have any more questions regarding our research, please contact us:
Banking & Payments IC Customer Success Team

customersuccess.fs@globaldata.com
_________________________________________________________________________________
©️ GlobalData Plc. All Rights Reserved. This information has been extracted from GlobalData’s Intelligence Center by a registered user. No part of this
publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic, mechanical, photocopying, recording,
or otherwise, without the prior permission of the publisher, GlobalData. The facts of this report are believed to be correct at the time of publication
but cannot be guaranteed. Please note that the findings, conclusions, and recommendations that GlobalData delivers will be based on information
gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such, GlobalData
can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect. GlobalData is not authorized
or permitted to provide regulated investment advice. Any data or analysis provided by GlobalData, either verbally or in writing, should not be considered
as regulated investment advice.

Status of Cross Border Payments

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Status of Cross Border Payments

Uploaded by

Copyright:

Available Formats

L E

The Status of Cross-border

2. Card-based Payments ................................................................................................................................................... 6

3. Correspondent Banking ................................................................................................................................................ 7

6. Real-time Settlement .................................................................................................................................................. 16

About GlobalData ............................................................................................................................................................... 24

Purchase the report to get full access

Figure 1: Factors most valued when making P2P payments

1.2 Key findings

1.3 Critical success factors

Purchase the report to get full access

Purchase the report to get full access

Purchase the report to get full access

4. Payment Service Providers

Purchase the report to get full access

4.2 Case study: Wise’s innovative cross-border solutions

Purchase the report to get full access

Figure 2: Total revenue, Wise

Purchase the report to get full access

Table 1: Benefits of blockchain: Why is usage increasing?

Purchase the report to get full access

Purchase the report to get full access

Figure 3: Countries with ongoing CBDC projects

5.4 Case study: BitPesa

Purchase the report to get full access

Figure 5: PayPal is the preferred method of cross-border payment in SEPA nations

6.2 Real-time payment linkages

Purchase the report to get full access

API – application programming interface

BIS – Bank for International Settlements

BOJ – Bank of Japan

CBDC – Central Bank Digital Currency

DLT – distributed ledger technology

IPS – instant payment system

SCT Inst – SEPA Instant Credit Transfer

SEPA – Single Euro Payments Area

TIPS – TARGET Instant Payment Settlement

7.2 Secondary sources

BIS (2023) Nexus overview [accessed June 2023]

ECB (2023) Single Euro Payments Area [accessed June 2023]

SWIFT (2023) Compliance [accessed June 2023]

Wise (2023) Wise [accessed June 2023]

7.3 Further reading

GlobalData, Competitor Profile: Samsung Pay 2023, June 2023

GlobalData, Competitor Profile: Affirm 2023, June 2023

GlobalData, Competitor Profile: Adyen 2023, May 2023

GlobalData, Competitor Profile: Paytm 2023, May 2023

GlobalData, Competitor Profile: Ideal 2023, May 2023

GlobalData, Competitor Profile: M-PESA 2023, May 2023

GlobalData, Competitor Profile: Stripe 2023, May 2023

Banking & Payments IC Customer Success Team

You might also like