Need for speed: The growing demand for real-time cross-border payments

In today’s digital-first world, consumers and businesses have an array of payment options, from contactless card payments to the increasingly popular digital wallets.

What factors influence the choice between these payment methods?

Speed, security and seamlessness, said Adeline Kim, Visa’s country manager for Singapore and Brunei.

“The rapid innovation in payments allows various ecosystem players to tap into new markets and customers,” she added, “but also drives fragmentation for consumers and merchants.” 

“Interoperability is a key focus area for us because we want consumers and businesses to pay and be paid seamlessly and securely, regardless of where they are,” Kim explained.

Seamless across borders

One area for improvement is cross-border payments, where there is a pressing need for streamlined operations and reduced administrative work. Current digital cross-border payment systems have yet to meet the expectations of enterprises and consumers who are used to real-time payments, Kim observed.

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Visa aims to bridge this gap with its push payment solution Visa Direct, which allows cardholders to top up their digital wallets and send funds overseas in real time.

The multi-currency transaction platform also supports businesses in expanding and reaching new customer segments.

Digitising these transactions in Asia-Pacific is a US$72 million (S$94 million) revenue opportunity, noted Kim.

Last year, Visa announced that the company partnered Chinese tech giant Tencent to enable Weixin users to receive inbound remittance in their digital wallets. Weixin is Tencent’s messaging service and super app. Its sister app is WeChat, which is offered outside of China.

The partnership extended the Visa Direct network to reach more than one billion Weixin users in China, one of the world’s largest inbound remittance markets.  

With this partnership, Visa Direct’s reach is estimated to reach nearly seven billion endpoints, including more than three billion cards, over two billion accounts and 1.5 billion digital wallets.

“The solution enables our partners to introduce a lower-cost option to do cross-border money transfer and provide real-time settlement,” said Kim.

Visa is also partnering with Nium, another Singapore-headquartered cross-border payments firm, to enable users to make real-time money transfers to Visa debit cardholders across South-east Asia.

“Fintechs are adept at addressing specific pain points in the commerce value chain and have emerged as a key player in unlocking new ways to move money for consumers and businesses,” said Kim.

Opportunities for growth

Kim highlighted a notable trend: The increasing preference for digital remittances among the foreign workforce in markets like Singapore. There are over 1.5 million foreign workers in Singapore, according to the Ministry of Manpower.

Asia-Pacific plays a pivotal role in the global remittance landscape, with three out of five of the top receiving countries – the Philippines, India and China – coming from the region.

“Remittances are personal and play an important role in uplifting ecosystems and economies across the globe,” said Kim. “We have experience moving money across borders seamlessly and securely, and remittance is one area of focus that we’re invested in.”

Kim shared that it is expanding its partnerships with remittance players such as Western Union to help digitise these transfers.

“In a digital-first world, (payments among businesses, consumers, and from governments to both) need to be as effortless and simple as consumer payments are today,” emphasised Kim. “As the way money moves continues to evolve, we believe that the trust, scale and security we bring to the table is more valuable than ever.”

This was produced in partnership with the Monetary Authority of Singapore and the Global Finance & Technology Network.

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