A Glimpse At How Global Payments Are Evolving
FREMONT, CA: Technology advancements and internet penetration have driven the evolution of the global banking networks, boosting investment and cross border trade. Digitalization of these networks are helping overcome obstacles and challenges, introducing consumers and businesses to new products and services from anywhere in the world.
International payments are no longer restricted to just corporates. It has become an essential consideration for retailers, individuals, as well as SMEs. This has made the way for a change from making high value, bulk transactions to a larger number of low value payments being processed. It is this change that financial institutions should to work on to keep up.
Global trade has been striving to overcome a number of challenges, from geo-political tensions, to Brexit, trade wars, and sanctions, all of which have had a massive impact on businesses operating worldwide. As though all of these challenges were not enough already, the COVID-19 pandemic happened, hampering plans for expansion beyond domestic territories. Companies and banks are struggling to survive through this uncertain situation, with increased regulations, higher costs and suffering correspondent relationships, all while profit margins continue to shrink. Cross border payments have become a priority across the world, with the G20 launching a set of initiatives to make these transactions cheaper, faster, and more transparent.
Traditional Banks Losing their Monopoly over Cross-Border Payments
Banks do not anymore have full monopoly over the cross border payments industry. Previously unchallenged approaches are now being tested by new players capable of coming up with innovative alternative solutions.
Banks have long known about the industry disruption brought about by payments businesses and fintech, as well as the need to invest in making improvements to legacy infrastructure in order to protect their position in the market.