Cross-border payments // $250 trillion in the next five years..
With a revenue pie already at over $200 billion and expanding at a high single-digit annual growth rate, and flows expected to reach $250 trillion by 2027, competition in the cross-border payments market is increasing. Over 40% of banks have already lost at least 5% of market share to FinTechs, and 89% expect to lose at least 5% of their share to FinTechs in the next 5–10 years.
Here are some key points on the future of cross-border payments from Citi:
- Cross-border payment flows are big and growing rapidly, with flows estimated to reach over $250 trillion by 2027. This presents a major revenue opportunity for banks and payment providers. The size of flows and revenue pie is attracting increased competition, including from FinTechs.
- Consumer expectations shaped by instant domestic payments are raising the bar for cross-border payments. Innovation is focused on improving speed, cost efficiency, and transparency. This includes evolving traditional rails to 24x7 availability, leveraging alternative payment methods like digital wallets, and harnessing technologies like AI.
- Digital assets like stablecoins and CBDCs are emerging and could supplement traditional cross-border rails once scalable use cases develop. Real-time liquidity management will be key as payments move toward 24x7.
- Banks are at risk of losing share to FinTechs if they don’t transform legacy systems and deliver best-in-class digital experiences. Key will be developing partnerships to expand capabilities. APIs are seen as the top technology to improve client experience.
- Delivering on speed, cost efficiency and transparency will be vital for cross-border payments providers to win share of flows expected to reach $250 trillion in the next 5 years. Both traditional and emerging players have roles to play in elevating the client experience.
Payments // any payments
What about crypto?
