New architecture for international payments is foundational for global growth

INTERNATIONAL payments are the essential lifeblood of the global economy. They enable the seamless flow of goods, services and capital across borders, ultimately benefiting businesses, consumers and communities.

For decades, international payments were powered by linear models designed for batch processing, correspondent banking and office-hour settlement cycles.

That architecture was effective in a world of physical documents, fixed-hour clearing and unilateral data ownership. Today’s global economy moves differently. Commerce flows through digital platforms, e-marketplaces and 24/7 ecosystems. Data travels instantly, but value moves in uneven intervals.

The World Bank estimates the global real-time payments market will grow at a compound annual growth rate of 35.5 per cent from 2023 to 2030.

Asia sits at the centre of this shift. Outbound cross-border payments from the region are expected to almost double from US$12.8 trillion in 2024 to US$23.8 trillion by 2032, with the Asia-Pacific’s share of global outflows rising from 32 per cent to nearly 37 per cent over the same period.

As supply chains diversify and digital commerce scales, the demand for a new payment architecture becomes structural rather than optional.

From rails to networks

Over the past decade, Asia has led the world in building real-time domestic payment systems. Mobile adoption, QR standardisation and digital wallets have created new expectations around immediacy.

The focus is now shifting to interoperability across borders. Bilateral linkages, such as Singapore’s PayNow with Thailand’s PromptPay, India’s UPI and Malaysia’s DuitNow, have enabled small businesses and individuals to receive foreign payments with only a mobile number.

DBS has observed a nearly threefold increase in cross-border DBS PayLah! QR transactions year on year, showing the scale of latent demand once the experience becomes instant.

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Work is also advancing on multilateral infrastructure. Project Nexus, driven by the Bank for International Settlements, aims to connect the instant payment systems of India, Malaysia, the Philippines, Singapore and Thailand through a single access framework.

This signals movement toward shared standards, not just bilateral bridges. The European Central Bank and Bank Indonesia have also joined as observers, underscoring the model’s global relevance.

Financial institutions remain central to this transition. Their role is evolving from operating individual rails to enabling network-level access to liquidity, compliance and settlement.

DBS, for example, provides near-instant to same-day payments across the globe through a combination of proprietary and external payment networks, including cross-border transfers to digital wallets to support rising e-commerce flows.

In the emerging landscape, the competitive advantage is not who owns the rail, but who orchestrates the movement of value across multiple rails.

The rising premium on trust

Instant settlement accelerates money movement, but also risk. In response, the industry is shifting from compliance as primarily a post-event control to one that is embedded within payments architecture. Artificial intelligence (AI)-based screening, inline anomaly detection and immutable audit records are transforming verification from a checkpoint into an inherent design feature.

The objective is no longer to slow a payment to ensure it is safe, but to make a safe payment flow at full speed.

This shift has triggered a deeper rethink of what a payment represents. Rather than being the end of a commercial process, payments are now seen as the synchronising layer between liquidity, working capital, data and supply-chain assurance.

A cross-border transfer that is inexpensive to send but expensive to reconcile merely shifts cost. True optimisation is therefore not about speed alone, but the alignment of money flows with the movement of data, risk and decision-making.

Tokenisation and blockchain technology

Even as the industry enhances existing payment rails, new technologies such as tokenisation and blockchains have emerged, promising to enable the speed, cost, transparency and access required by modern commerce.

Although these technologies are not novel, we are at a pivotal moment of convergence. With experience gathered from years of pilots and sandboxes, traditional financial institutions and corporations are actively exploring the use of distributed ledger technology (DLT) and new instruments such as tokenised deposits and stablecoins for international payments.

The benefits of tokenisation are compelling. Tokenised forms of money can be transferred 24/7, with near-instant atomic settlement. Leveraging a common, immutable ledger for value transfer increases transparency and reduces manual reconciliation. Transaction costs and settlement times are reduced, unlocking trapped liquidity.

In addition, tokenised money is programmable. Smart contracts can be embedded to automate processes and rules, allowing greater control and efficiency.

Last year, DBS launched a suite of blockchain-enabled services, offering institutions instant, 24/7 real-time payments using the bank’s permissioned blockchain. By integrating these capabilities with the bank’s core payment engine and market payment infrastructures, these services are scalable and enable institutions access to millions of customers and merchants.

Institutional clients can leverage smart contracts to automate fund movements based on predefined conditions, ensuring compliance, security and transparency.

However, while the vision of using tokenised money and public permissioned blockchains for international payments is powerful, challenges remain.

Regulatory developments across major jurisdictions have yet to be harmonised. While improvements have been made to expand transaction capacities on major public blockchains, the ecosystem remains fragmented and lacks interoperability.

Enabling instantaneous atomic swaps of tokenised money across different currencies for FX markets remains complex. Ultimately, moving tokenised money beyond native crypto ecosystems and into mainstream payments requires universal trust.

The formation of the current global correspondent banking network was an organic process that took decades, evolving alongside trade, bilateral relationships, trust and standardisation. Change needs time. Scaling new technologies requires navigating the same challenges of standardisation, regulation, trust and achieving the network effects that shaped the correspondent banking world.

Such initiatives have already begun. In September, the Society for Worldwide Interbank Financial Telecommunication (Swift) – the world’s leading provider of secure financial messaging services – announced it will develop a blockchain-based digital ledger together with a consortium of over 30 banks, including DBS.

The ledger, to be accessible by Swift’s global banking network, aims to make instant, always-on cross-border transactions a reality, while remaining interoperable with traditional correspondent banking rails.

Converging toward a new operating rhythm

The future belongs to those capable of integrating the integrity of existing systems with the intelligence of emerging ones.

In such a model, value creation is no longer measured by fee compression but by capability expansion, with liquidity that moves continuously, rather than being pre-funded, and compliance that is automated, rather than layered.

The industry is not moving towards disruption, but towards a redesigned operating model where the transfer of value is inseparable from the transfer of certainty and information.

That is the point at which transformation, trust and value transfer converge, and the point at which international payments become not just faster, but also foundational to the next phase of global economic growth.

Rachel Chew is chief operating officer (global transaction services) and Tesy Mathews is group head of cash product management (global transaction services), DBS Bank