Insights

Why Cross-Border Payments Matter and What Lies Ahead in 2025

Pat Crawley
Pat Crawley
34 Min Read
why-cross-border-payments-matter-and-what-lies-ahead-in-2025

Wednesday, 16/10/2024 | 13:08 GMT by Finance Magnates Staff

  • Visa has operated at the vanguard of innovation, helping act as an agent of change.

visa

Cross-border payments have quietly developed into the financial lifeblood of international trade, investment, and economic growth. Whether it’s multinational corporations transferring funds across subsidiaries, or consumers purchasing goods from overseas, the ability to move money across borders efficiently and securely is absolutely vital.

While cross-border payments have seen significant growth in recent years, they also face challenges that require innovative solutions. For its part, companies such as Visa have operated at the vanguard of this trend, helping act as agents of change in the industry.

The Importance of Cross-Border Payments

The easiest way to underscore cross-border payments is to articulate the scope and worth of them. Last year, these payments were essential for facilitating global trade, which accounted for roughly $32 trillion.

Companies routinely engage in importing and exporting need reliable payment systems to settle transactions, manage supply chains, and foster business relationships across different countries. However, without smooth, secure cross-border payment systems, global trade would be hampered by increased costs and inefficiencies.

Furthermore, these payments have proven to be drivers of economic growth by enabling foreign direct investment (FDI), capital flows, and the development of international business relationships. Nowhere is this more evident than with emerging markets, which rely on foreign investments and remittances to strengthen their economies. For instance, remittances sent to low- and middle-income countries reached over $540 billion last year.

On a micro level, remittances can provide a lifeline for families. For millions of migrant workers, cross-border payments are the paramount means of supporting their families back home. Remittances sent from countries like the United States, the UK, and Gulf nations to regions like Latin America, Sub-Saharan Africa, and South Asia play a critical role in reducing poverty and improving living conditions. In many developing countries, remittance flows outstrip foreign aid, making efficient cross-border payment systems essential for social and economic stability.

Finally, the rise of e-commerce has dramatically increased the need for efficient cross-border payments. Consumers can now purchase goods and services from anywhere in the world, and businesses need payment systems that can handle international transactions seamlessly. Cross-border payments ultimately enable consumers to access a wider range of products while also allowing businesses to expand their customer base globally.

Challenges in Cross-Border Payments

Cross-border payments remain crucial to the global economy, however, face several persistent challenges, many without easy solutions. Perhaps the most for common complaint of these payments are high costs. For example, remittance can be expensive with fees ranging from 5% to 10% of the transaction amount – even higher costs can be associated with smaller payments. These costs are especially burdensome for migrant workers sending money home, where every dollar matters.

Timing is also a key pain point. Despite advancements in technology, cross-border payments can take several days to settle, especially when multiple banks and correspondent institutions are involved. This delay can disrupt business operations and create uncertainty for recipients waiting for funds.

Any time money is transferred between jurisdictions regulatory protocols can be an issue, with cross-border payments being no exception. These transactions are subject to a complex web of regulations, including anti-money laundering (AML) laws, sanctions, and currency controls. These regulations vary by country and can create hurdles for businesses and individuals trying to move money across borders.

Any individual who has ever engaged in money transfers between different currencies is aware of rate fluctuations and volatility. These add another layer of complexity to cross-border payments. Businesses engaged in international trade often face currency risk, which can affect profit margins and lead to unpredictable cash flows. Similarly, individuals sending remittances may find that exchange rate volatility significantly reduces the value of the funds received.

Why Visa is Leading the Way Forward via Payments Innovations

Given these challenges, it comes as no surprise that the payments industry is open to disruption and innovation. As one of the world’s largest payment networks, Visa has been at the forefront of this transformation. With its vast global infrastructure, innovative solutions, and strategic partnerships, Visa is leading the way forward in cross-border payments, positioning itself as a key player in shaping the future of international finance.

The company, with its extensive network spanning over 200 countries and territories, is leveraging its scale, technology, and partnerships to address these challenges and redefine what’s possible in cross-border payments.

Visa has partnered with Finance Magnates to launch a quick survey to ascertain the latest insights and feedback from all participating professionals. Whether you are a financial professional, fintech leader, or business executive, all are encouraged to fill out the survey. Participate today by accessing the following link and become an agent of change in improving cross-border payments for millions.

Cross-border payments have quietly developed into the financial lifeblood of international trade, investment, and economic growth. Whether it’s multinational corporations transferring funds across subsidiaries, or consumers purchasing goods from overseas, the ability to move money across borders efficiently and securely is absolutely vital.

While cross-border payments have seen significant growth in recent years, they also face challenges that require innovative solutions. For its part, companies such as Visa have operated at the vanguard of this trend, helping act as agents of change in the industry.

The Importance of Cross-Border Payments

The easiest way to underscore cross-border payments is to articulate the scope and worth of them. Last year, these payments were essential for facilitating global trade, which accounted for roughly $32 trillion.

Companies routinely engage in importing and exporting need reliable payment systems to settle transactions, manage supply chains, and foster business relationships across different countries. However, without smooth, secure cross-border payment systems, global trade would be hampered by increased costs and inefficiencies.

Furthermore, these payments have proven to be drivers of economic growth by enabling foreign direct investment (FDI), capital flows, and the development of international business relationships. Nowhere is this more evident than with emerging markets, which rely on foreign investments and remittances to strengthen their economies. For instance, remittances sent to low- and middle-income countries reached over $540 billion last year.

On a micro level, remittances can provide a lifeline for families. For millions of migrant workers, cross-border payments are the paramount means of supporting their families back home. Remittances sent from countries like the United States, the UK, and Gulf nations to regions like Latin America, Sub-Saharan Africa, and South Asia play a critical role in reducing poverty and improving living conditions. In many developing countries, remittance flows outstrip foreign aid, making efficient cross-border payment systems essential for social and economic stability.

Finally, the rise of e-commerce has dramatically increased the need for efficient cross-border payments. Consumers can now purchase goods and services from anywhere in the world, and businesses need payment systems that can handle international transactions seamlessly. Cross-border payments ultimately enable consumers to access a wider range of products while also allowing businesses to expand their customer base globally.

Challenges in Cross-Border Payments

Cross-border payments remain crucial to the global economy, however, face several persistent challenges, many without easy solutions. Perhaps the most for common complaint of these payments are high costs. For example, remittance can be expensive with fees ranging from 5% to 10% of the transaction amount – even higher costs can be associated with smaller payments. These costs are especially burdensome for migrant workers sending money home, where every dollar matters.

Timing is also a key pain point. Despite advancements in technology, cross-border payments can take several days to settle, especially when multiple banks and correspondent institutions are involved. This delay can disrupt business operations and create uncertainty for recipients waiting for funds.

Any time money is transferred between jurisdictions regulatory protocols can be an issue, with cross-border payments being no exception. These transactions are subject to a complex web of regulations, including anti-money laundering (AML) laws, sanctions, and currency controls. These regulations vary by country and can create hurdles for businesses and individuals trying to move money across borders.

Any individual who has ever engaged in money transfers between different currencies is aware of rate fluctuations and volatility. These add another layer of complexity to cross-border payments. Businesses engaged in international trade often face currency risk, which can affect profit margins and lead to unpredictable cash flows. Similarly, individuals sending remittances may find that exchange rate volatility significantly reduces the value of the funds received.

Why Visa is Leading the Way Forward via Payments Innovations

Given these challenges, it comes as no surprise that the payments industry is open to disruption and innovation. As one of the world’s largest payment networks, Visa has been at the forefront of this transformation. With its vast global infrastructure, innovative solutions, and strategic partnerships, Visa is leading the way forward in cross-border payments, positioning itself as a key player in shaping the future of international finance.

The company, with its extensive network spanning over 200 countries and territories, is leveraging its scale, technology, and partnerships to address these challenges and redefine what’s possible in cross-border payments.

Visa has partnered with Finance Magnates to launch a quick survey to ascertain the latest insights and feedback from all participating professionals. Whether you are a financial professional, fintech leader, or business executive, all are encouraged to fill out the survey. Participate today by accessing the following link and become an agent of change in improving cross-border payments for millions.

Finance Magnates Staff
  • 4259 Articles
  • 122 Followers
  • 4259 Articles
  • 122 Followers

Finance Magnates Daily Update

Get all the top financial news delivered straight to your inbox. Stay informed, stay ahead.

Keep Reading

More from the Author

FinTech

FM’s Andrea Badiola Mateos at LSEG’s Cyprus event

FM’s Andrea Badiola Mateos at LSEG’s Cyprus event

FM’s Andrea Badiola Mateos at LSEG’s Cyprus event

FM’s Andrea Badiola Mateos at LSEG’s Cyprus event

FM’s Andrea Badiola Mateos at speaking in a panel discussion at LSEG’s Cyprus event

FM’s Andrea Badiola Mateos at speaking in a panel discussion at LSEG’s Cyprus event

FM’s Andrea Badiola Mateos at speaking in a panel discussion at LSEG’s Cyprus event

FM’s Andrea Badiola Mateos at speaking in a panel discussion at LSEG’s Cyprus event

More Videos

  • The Role of PAMM, MAM & Copy Trading in Business Growth Strategies | Webinar

    The Role of PAMM, MAM & Copy Trading in Business Growth Strategies | Webinar

    The Role of PAMM, MAM & Copy Trading in Business Growth Strategies | Webinar

    The Role of PAMM, MAM & Copy Trading in Business Growth Strategies | Webinar

    The Role of PAMM, MAM & Copy Trading in Business Growth Strategies | Webinar

    The Role of PAMM, MAM & Copy Trading in Business Growth Strategies | Webinar

    The copy trading market is projected to double in size, growing from $2.2 billion to $4 billion by the end of this decade. In light of this, brokers and financial institutions are increasingly adopting PAMM, MAM, and Copy Trading solutions to scale operations and drive profitability. In this insightful webinar, Sergey Ryzhavin, Product Owner at B2COPY, outlines the advanced features of the B2COPY platform, showcasing how it enhances Copy Trading, PAMM, and MAM performance. Sergey also explores strategies for using these tools to attract new clients, improve customer engagement, and create additional revenue streams. 📣 Stay updated with the latest in finance and trading! Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today: 🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/ 👍 Facebook: https://www.facebook.com/financemagnates/ 📸 Instagram: https://www.instagram.com/financemagnates_official 🐦 X (Twitter): https://twitter.com/financemagnates/ 📡 RSS Feed: https://www.financemagnates.com/feed/ ▶️ Telegram: https://t.me/financemagnatesnews Don’t miss out on our latest videos, interviews, and event coverage. 🔔 Subscribe to our YouTube channel for more!🔔

    The copy trading market is projected to double in size, growing from $2.2 billion to $4 billion by the end of this decade. In light of this, brokers and financial institutions are increasingly adopting PAMM, MAM, and Copy Trading solutions to scale operations and drive profitability. In this insightful webinar, Sergey Ryzhavin, Product Owner at B2COPY, outlines the advanced features of the B2COPY platform, showcasing how it enhances Copy Trading, PAMM, and MAM performance. Sergey also explores strategies for using these tools to attract new clients, improve customer engagement, and create additional revenue streams. 📣 Stay updated with the latest in finance and trading! Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today: 🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/ 👍 Facebook: https://www.facebook.com/financemagnates/ 📸 Instagram: https://www.instagram.com/financemagnates_official 🐦 X (Twitter): https://twitter.com/financemagnates/ 📡 RSS Feed: https://www.financemagnates.com/feed/ ▶️ Telegram: https://t.me/financemagnatesnews Don’t miss out on our latest videos, interviews, and event coverage. 🔔 Subscribe to our YouTube channel for more!🔔

    The copy trading market is projected to double in size, growing from $2.2 billion to $4 billion by the end of this decade. In light of this, brokers and financial institutions are increasingly adopting PAMM, MAM, and Copy Trading solutions to scale operations and drive profitability. In this insightful webinar, Sergey Ryzhavin, Product Owner at B2COPY, outlines the advanced features of the B2COPY platform, showcasing how it enhances Copy Trading, PAMM, and MAM performance. Sergey also explores strategies for using these tools to attract new clients, improve customer engagement, and create additional revenue streams. 📣 Stay updated with the latest in finance and trading! Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today: 🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/ 👍 Facebook: https://www.facebook.com/financemagnates/ 📸 Instagram: https://www.instagram.com/financemagnates_official 🐦 X (Twitter): https://twitter.com/financemagnates/ 📡 RSS Feed: https://www.financemagnates.com/feed/ ▶️ Telegram: https://t.me/financemagnatesnews Don’t miss out on our latest videos, interviews, and event coverage. 🔔 Subscribe to our YouTube channel for more!🔔

    The copy trading market is projected to double in size, growing from $2.2 billion to $4 billion by the end of this decade. In light of this, brokers and financial institutions are increasingly adopting PAMM, MAM, and Copy Trading solutions to scale operations and drive profitability. In this insightful webinar, Sergey Ryzhavin, Product Owner at B2COPY, outlines the advanced features of the B2COPY platform, showcasing how it enhances Copy Trading, PAMM, and MAM performance. Sergey also explores strategies for using these tools to attract new clients, improve customer engagement, and create additional revenue streams. 📣 Stay updated with the latest in finance and trading! Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today: 🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/ 👍 Facebook: https://www.facebook.com/financemagnates/ 📸 Instagram: https://www.instagram.com/financemagnates_official 🐦 X (Twitter): https://twitter.com/financemagnates/ 📡 RSS Feed: https://www.financemagnates.com/feed/ ▶️ Telegram: https://t.me/financemagnatesnews Don’t miss out on our latest videos, interviews, and event coverage. 🔔 Subscribe to our YouTube channel for more!🔔

    The copy trading market is projected to double in size, growing from $2.2 billion to $4 billion by the end of this decade. In light of this, brokers and financial institutions are increasingly adopting PAMM, MAM, and Copy Trading solutions to scale operations and drive profitability. In this insightful webinar, Sergey Ryzhavin, Product Owner at B2COPY, outlines the advanced features of the B2COPY platform, showcasing how it enhances Copy Trading, PAMM, and MAM performance. Sergey also explores strategies for using these tools to attract new clients, improve customer engagement, and create additional revenue streams. 📣 Stay updated with the latest in finance and trading! Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today: 🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/ 👍 Facebook: https://www.facebook.com/financemagnates/ 📸 Instagram: https://www.instagram.com/financemagnates_official 🐦 X (Twitter): https://twitter.com/financemagnates/ 📡 RSS Feed: https://www.financemagnates.com/feed/ ▶️ Telegram: https://t.me/financemagnatesnews Don’t miss out on our latest videos, interviews, and event coverage. 🔔 Subscribe to our YouTube channel for more!🔔

    The copy trading market is projected to double in size, growing from $2.2 billion to $4 billion by the end of this decade. In light of this, brokers and financial institutions are increasingly adopting PAMM, MAM, and Copy Trading solutions to scale operations and drive profitability. In this insightful webinar, Sergey Ryzhavin, Product Owner at B2COPY, outlines the advanced features of the B2COPY platform, showcasing how it enhances Copy Trading, PAMM, and MAM performance. Sergey also explores strategies for using these tools to attract new clients, improve customer engagement, and create additional revenue streams. 📣 Stay updated with the latest in finance and trading! Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today: 🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/ 👍 Facebook: https://www.facebook.com/financemagnates/ 📸 Instagram: https://www.instagram.com/financemagnates_official 🐦 X (Twitter): https://twitter.com/financemagnates/ 📡 RSS Feed: https://www.financemagnates.com/feed/ ▶️ Telegram: https://t.me/financemagnatesnews Don’t miss out on our latest videos, interviews, and event coverage. 🔔 Subscribe to our YouTube channel for more!🔔

  • Join us at FMLS:24 to connect with global institutional brokers. Secure your spot today! #fmls24

    Join us at FMLS:24 to connect with global institutional brokers. Secure your spot today! #fmls24

    Join us at FMLS:24 to connect with global institutional brokers. Secure your spot today! #fmls24

    Join us at FMLS:24 to connect with global institutional brokers. Secure your spot today! #fmls24

    Join us at FMLS:24 to connect with global institutional brokers. Secure your spot today! #fmls24

    Join us at FMLS:24 to connect with global institutional brokers. Secure your spot today! #fmls24

  • 🌟 Explore cutting-edge solutions and connect with fintech leaders at FMLS:24!

    🌟 Explore cutting-edge solutions and connect with fintech leaders at FMLS:24!

    🌟 Explore cutting-edge solutions and connect with fintech leaders at FMLS:24!

    🌟 Explore cutting-edge solutions and connect with fintech leaders at FMLS:24!

    🌟 Explore cutting-edge solutions and connect with fintech leaders at FMLS:24!

    🌟 Explore cutting-edge solutions and connect with fintech leaders at FMLS:24!

  • 🤝 Meet industry leaders at the premier event for brokers – FMLS:24. Secure your spot today!

    🤝 Meet industry leaders at the premier event for brokers – FMLS:24. Secure your spot today!

    🤝 Meet industry leaders at the premier event for brokers – FMLS:24. Secure your spot today!

    🤝 Meet industry leaders at the premier event for brokers – FMLS:24. Secure your spot today!

    🤝 Meet industry leaders at the premier event for brokers – FMLS:24. Secure your spot today!

    🤝 Meet industry leaders at the premier event for brokers – FMLS:24. Secure your spot today!

You Might Also Like

FCA and Bank of England Prioritize Payment Systems in Revised MoU

Revolut Leads Digital Banking Surge in The UK as Downloads Top Legacy Banks

“More Returning Investors Signal the Maturity of the Industry”: eToro’s Daniel Moczulski

“We Bundled, Unbundled, and Now We’re Rebundling Financial Apps”: Guava’s McCracken

Revolut News: Stock Sales Hit $1B Mark as Investors Cash In

TAGGED:
Share This Article
Leave a comment

New Releases

- Advertisement -
Ad image

Trending Stories