The Payments Association has released a new whitepaper exploring the growth potential and future of cross-border payments. The whitepaper cites technology as a key driver in making cross-border payments cheaper, faster and more accessible.

In doing so, it will bring benefits to businesses and households in emerging and developing countries. In recent decades, the world has witnessed a surge in cross-border payments, driven by the globalisation of trade, capital, and migration flows. Despite such growth, cross-border payments remain prohibitively expensive, which leaves the most vulnerable behind.

While domestic payments are becoming instant and digital, cross-border payments have yet to benefit from the transformative power of digital technologies. Against this context, The Payments Association’s Cross-border Working Group, with the support of Benefactor Payall, has completed research into the current challenges and obstacles that financial institutions face when trying to deliver cross-border payments. The research has been completed following a survey of the industry, with a series of interviews with senior payments experts.

This process has empowered the whitepaper to outline a new path for the cross-border payments ecosystem, unlocking the untapped potential for financial institutions, businesses, and individuals who rely on and grapple with international fund transfers. The report's conclusion A greater pivot to tech solutions from legacy debate is needed;  The regulatory obsession with efficiency is premature;  A roadblock of incentives means some things will never change;  Technology needs to reposition and redefine the correspondent bank role;  High-risk classification needs an overhaul – via the ID Authentication Key;  The convergence of XB and domestic will yield many easy wins;  Liquidity optimisation is hidden gold;  Economic reset is a double-edged sword;  Crypto, CBDCs, Blockchain: not the answer but is a component;  A central bank consortium would speed change. The main theme of the research is that technology remains the key delta in the race for cross-border payments domination.

Furthermore, the whitepaper argues that the biggest US banks appear to have stolen a march on their European peers in terms of development. The research concludes that, as might be expected, there is no easy fix to many of the long-standing frictions in cross-border payments. However, a combination of technology, a fresh way of approaching certain legacy challenges, and a willingness of like-minded Central Banks and regimes to agree on high-level standards, and use tech to implement them, will be a very good starting position.

Ultimately, lower costs will be a clear outcome, but in the interim, and in a new world of higher rates and inflation, it is more important to avoid strangling innovation than it is to deliver on the order of thinking established several years ago before the world changed during the pandemic. About The Payments Association The Payments Association is a community for all companies in payments, with the purpose of empowering the influential community in payments, where the connections, collaboration and learning shape an industry that works for all. It works closely with industry stakeholders such as the Bank of England, the FCA, HM Treasury, the PSR, Pay.UK, UK Finance and Innovate Finance.

Through its comprehensive programme of activities and with guidance from an independent Advisory Board of payments CEOs, The Payments Association facilitates the connections and builds the bridges that join the ecosystem together and make it stronger. These activities include a programme of monthly digital and face-to-face events including an annual conference, PAY360, The PAY360 Awards dinner, CEO roundtables and training activities. .