NEW YORK—Cross-border payments continue to be an immense portion of the international economy, clocking in at $29 trillion in 2019, a figure projected to balloon to an estimated $39 trillion in the next two years.
Moving that money securely and swiftly is another matter, however, as pandemic-induced chaos continues to roil markets and embolden hackers, PYMNTS reported. “The familiar difficulties of cross-border payments – fees, currencies, funds trapped in transit – combine to form frictions that digital platforms are now removing from the equation.”
PYMNTS’ June 2020 Smarter Payments Tracker revealed “dedicated remittance-as-a-service platforms have … emerged to take the burden off of banks and other companies handling cross-border payments. All of these alternatives to traditional remittance and cross-border payment systems will likely alleviate the pain points that tend to negatively impact the cross-border payments experience.”
Making up the Difference
“And with The World Bank anticipating a 20% drop in remittances in 2020 due to the pandemic, seamless remittances will need to make up the difference,” PYMNTS stated.
“The drop in remittance has [a] significant impact on world economies, especially for developing markets, which are highly dependent on remittances, as they are often seen as a source of spending power for recipients in [their] home countries. A decline in spending power often has severe repercussions on [a] country’s economy as [funds] are frequently used to create a fiscal cushion for governments,” Yogesh Sangle, global head of consumer business at the Fintech Nium, told PYMNTS.