Cross-border payment landscape evolutions in 2024: a look at the influential factors and developments
The cross-border payments industry is poised for significant change in the coming year, according to industry experts. The year 2023 saw a marked shift in the industry following the economic and geopolitical downturns of 2022, and 2024 is set to build upon these changes.
The predictions for 2024 can be categorised into three main areas: geopolitical and social trends, technological advances, and industry evolution. These trends collectively shape the cross-border payments industry, influencing its development and change.
In the geopolitical and social trends category, trade disruptions due to tariffs and geopolitical risks will continue to affect margins across industries, compressing profitability and complicating cost management in import/export activities. Export-heavy industries, particularly agricultural producers, may face additional challenges from shifting global trade policies. On a positive note, growth in migrant worker remittances and C2C payments driven by app-based remittance offerings will increase, especially in migration corridors like US-Mexico, with remittance fees falling significantly due to stablecoin use. Consumer wage growth outpacing inflation since 2019 supports retail credit performance and consumer resilience, although it is now decelerating amid economic uncertainties affecting consumer spending patterns. Increasing government disaster assistance payments and modest expense reductions may enhance farm cash income despite agricultural price pressures.
The trends in the technological advances category are expected to influence the cross-border payments industry. The adoption of ISO 20022 standards enables richer, data-filled transactions, improving automation of payment reconciliations and reducing disputes in B2B cross-border payments. Distributed-ledger technology (blockchain) testing for payment-versus-payment (PvP) solutions aims to reduce settlement risks for longer-dated supply contracts in global supply chains. Stablecoin penetration lowers transaction costs for remittances and cross-border payments, enhancing affordability and speed. Super-apps embedding financial services, such as micro-savings, micro-credit, and bill payment features, boost retention and cross-selling within cross-border payment ecosystems. Continued focus on domestic payment system enhancements that underpin global cross-border payment improvements, with innovation hubs monitoring technological trends, is also anticipated.
The trends in the industry evolution category are expected to change the shape of the cross-border payments industry. B2B payments dominate cross-border volumes, accounting for about 60% market share in 2024, fueled by digitization in procurement and e-invoicing mandates. Consumer-to-business (C2B) and business-to-consumer (B2C) cross-border payments are growing robustly, with the C2B market size reaching $4.5 trillion in 2024 and expected to rise significantly by 2032. C2C payments are growing fastest, with a CAGR (compound annual growth rate) of approximately 9%. The cross-border payment market size is expected to increase substantially through 2030, with B2B flows projected to grow from $39.3 trillion in 2023 to $56.1 trillion by 2030. Loyalty rewards and multi-currency wallet functions integrated by providers without increasing compliance burdens to capture greater wallet share in cross-border contexts are also expected.
These predictions reflect a mix of macroeconomic influences, technological adoption, and evolving payment behaviours shaping the cross-border payments landscape in 2024. To stay updated on these developments, a free account is required to access the newsletter, which provides extensive research and analysis on cross-border payments globally. The newsletter is a valuable resource for anyone interested in the cross-border payments industry. As the industry continues to evolve, it is essential to keep abreast of these changes to navigate the ever-maturing cross-border payments landscape successfully.
- In the context of technological advances, the anticipated adoption of ISO 20022 standards and distributed-ledger technology (blockchain) are expected to shape the cross-border payments industry, positively impacting areas such as payment reconciliation, settlement risks, and remittance fees.
- As the cross-border payments industry evolves, there is a significant growth projected in consumer-to-business (C2B) and business-to-consumer (B2C) cross-border payments, with C2C payments showing the fastest growth, indicating a shift in focus towards these transaction types, reflecting changes in the broader finance and technology sectors.
