Anticipated Forecasts for Cross-Border Payments Sector in 2024
Cross-Border Payments in 2024: A Year of Evolution
The cross-border payments industry is poised for significant changes in the coming year, according to FXC Intelligence's latest predictions. The predictions, grouped into three categories - geopolitical and social trends, technological advances, and industry evolution - offer insights into the ongoing evolution of the industry driven by technology, regulatory shifts, and market demands.
Geopolitical and Social Trends
As we move forward, emerging markets will continue to dominate as the key focus for cross-border payment flows. Funds moving between developed markets and emerging regions are expected to create large margins but also opaque fees and speed issues. Regulatory requirements and sanctions screening will become more stringent, affecting the compliance frameworks for cross-border payments. New government policies, such as remittance taxes in some countries, may push users from cash to digital payments, influencing remittance behaviors.
Technological Advances
The continued growth and integration of stablecoins in cross-border payments are expected to expand significantly, potentially reaching a multi-trillion dollar market by 2028. The adoption of new messaging standards such as SWIFT’s migration from MT to ISO 20022 MX messages will enhance transparency, data richness, and support for diverse alphabets related to increasing Asia-focused flows. Programmable money, automated compliance, tokenized deposits, and instant settlements enabled by blockchain and digital currencies will generate new operational efficiencies and revenue streams for financial institutions.
Industry Evolution
Cross-border payment providers like Remitly are expanding their product lines and customer bases, with higher average send volumes and revenues per active customer, reflecting maturation and deeper market penetration. The cross-border payments market size continues to grow, with FXC Intelligence projecting a retail cross-border payments market approaching $40tn in 2024. The use cases for stablecoins and digital assets in cross-border payments are broadening, including corporate treasury management, remittances, and institution-level liquidity management. Transaction banking businesses are focused on improving speed and transparency to capture margins in predominantly emerging market corridors where demand is highest.
In 2024, a continued focus on faster payments is expected. The industry is expected to place a renewed focus on operating with insight and transparency. The long-term strategy for remittances will be a focus. Novel avenues for payment processing will be a focus, with QR codes expected to see growing geographic adoption. Some key announcements on Central Bank Digital Currencies (CBDCs) are expected. Cross-border gifting as an alternative to classic remittances is predicted to rise.
The G20's Roadmap for enhancing cross-border payments will be monitored for its impact. The use of generative AI in the cross-border payments industry is anticipated. Significant growth in B2B ecommerce is expected, with the industry expected to place a renewed focus on operating with insight and transparency.
2024 is set to be a year of evolution for cross-border payments, following the economic and geopolitical downturn of 2022. The financial landscape is expected to shift and develop over the next year in response to long-standing factors. Our platform has published its predictions for the cross-border payments industry in 2024, offering a comprehensive look at the trends shaping the future of the industry.
- The financial landscape, particularly in the cross-border payments industry, is anticipated to shift and develop in 2024, with a renewed focus on operating with insight and transparency, driven by the growth and integration of technological advancements such as programmable money, automated compliance, tokenized deposits, and instant settlements enabled by blockchain and digital currencies.
- The ongoing evolution of the cross-border payments industry will be influenced by significant growth in B2B ecommerce, the broadening use cases for stablecoins and digital assets including corporate treasury management and institution-level liquidity management, and the predicted rise in cross-border gifting as an alternative to classic remittances.
