Voice of the Industry

How fintechs are taking their stake in cross-border payments

Tuesday 2 March 2021 10:14 CET | Editor: Stefana Ivan | Voice of the industry

Peter Theunis of Radar Payments elaborates on why fintechs are chosen over banks and the advantages that make them proficient in the realm of cross-border payments

Cross-border payments have always been a concern for consumers and businesses, as sending money internationally has been a challenging process. There is a simple reason for this, since there is not a single omnipresent system that connects various banks all over the world, through which an international transaction can be done. There are schemes, SWIFT, correspondent banks and, on top, fees are not transparent, while the variety of daily changing currency rates adds in complexity. Although the market is not a straight road, the payment business is getting bigger and bigger, as we keep seeing an increase in commerce trades. 

In the midst of this era, cross-border payments through banks remain a difficult process. We are now seeing ambitious fintechs or giant ecommerce players like Amazon and Alibaba eradicating all barriers in payments by letting customers pay from any part of the world by using their fingertips. 

Currently, as of 2020, the cross-border payment market is valued at nearly USD 21 trillion, and it is only expected to grow exponentially in the coming years. Banks are usually terrified of the consequences that come with the difficulties of cross-border payments – i.e., the process of having dissatisfied customers. Various governments are changing the way international payments are made, which results in variations between the original and the receiving countries. 

In common perception, cross-border payments are seen as a challenge mainly because of cost, speed, and transparency. With cost, elements such as transaction fees, account fees, and FX conversion come into play, making international transfers an expensive affair. The time that is involved in processing a cross-border payment, as the time taken for funding and defunding, is usually elongated. As users have limited access to tracking the progress of their transfers, constant ambiguity revolves around financial risk and fraud. 

Cross-border payments act as an integral link for the livelihood and economy of migrants from all over the globe. Furthermore, they have also been associated with global trade, and due to the high volume of transactions that come with it, fintechs have been seeing this market as an opportunity. They have discovered contactless, swift solutions that eradicate the concept of the middleman. 

Looking at one of the largest cross-border payment markets – China –, startups are rivalling to change the way we trade and pay with neighbours and beyond. Geoswift in Hong Kong had to adapt to make payments faster than ever. They recently enabled overseas customers to remit money directly into bank accounts in China via UnionPay, through a partnership with Nium, a Singapore-based fintech startup that provides digital, international money transfer services to individuals and businesses. Traditionally, sending remittances to China required business or personal users to transfer funds into that market; however, the recipient had to pick up funds at a bank branch or through a remittance centre. This service allows users to make real-time fund transfers into UnionPay card accounts connected to 14 banks in China, while another 50 banks will be able to get funding into another 48 banks in that market. 

The fintechs involved in international transfers have been showing significant progress over the years. Companies like TransferWire, a billion-dollar fintech, WorldRemit from UK, and InstaRem, a fintech from Singapore, raised funds in their initial years and are already profit-making organisations. Fintechs have certainly changed the game of international remittances, and consumers all around the globe are making them their first choice for the same reason. 

Why are fintechs chosen over banks, which have traditionally represented the entity that has transferred funds from one country to another? It is because fintechs have various advantages that make them proficient in the realm of cross-border payments. Fintechs, with their unbeatable technology, provide transfers quicker than traditional banks, as their apps are designed to eliminate the extra time needed. They also create new rails, connecting directly to central banks, as does TransferWise. 

Due to the eradication of multiple costs that are involved in a traditional bank transfer, fintechs had the competitive edge of providing better exchange rates to their end users. Customers were also able to choose from their desired payment method – credit card, debit card, and other non-traditional payment options such as Google Pay and Apple Pay. Fintechs are also eligible for providing multi-currency accounts – so, whenever the receiver gets the money, it is in the same currency. Therefore, there is no need to worry about exchange rates. Apart from these advantages, the cherry on top is the inclusion of AI in cross-border payments. Big Data provides vital insights related to transaction frequency, devices, locations, and so on, giving the fintechs an opportunity to study their audience. 

Fintechs that are looking to provide solutions for remittances are blooming organisations. With their pocketful of new technology, they are able to assist through their existing product range or even build a service from scratch, as per the organisation’s requirements. They are looking for newer ways to overshadow the concept of traditional correspondent banking, mainly keeping remittances and peer-to-peer payments at the forefront. Real-time payments, PSD2, and open banking systems are drastically changing the world of cross-border payments. As we keep moving ahead, the role of fintech in international payments is only going to upsurge at an unbeatable pace – and transferring money to another country will be as ordinary as buying your day-to-day groceries.

This editorial was first published in our Cross-Border Payments and Ecommerce Report 2020–2021, which assesses the change of pace that occurred in 2020 and provides a comprehensive overview of the major trends driving growth in this space, being the ultimate source of information for players interested in selling across borders.

About Peter Theunis

Peter Theunis is Senior Vice President, Managing Director, Board Member at BPC and CEO & co-founder of Radar Payments. Peter is an inspiring leader and strategist with over 20 years of experience in payments. Peter carries multiple hats at BPC, a leading Switzerland-based provider of banking, ecommerce, and mobility solutions. He leads sales and delivery teams across Europe and Asia. He is also the co-founder and co-CEO of Radar Payments, BPC’s newest paytech and payment processing business. 


About Radar Payments

Radar Payments is a paytech firm specialised in end-to-end omnichannnel payment processing. The company offers out-of-the-box acceptance and issuance of credit, debit, prepaid, virtual cards in addition to supporting e-wallets and emerging payment instruments. Radar Payments delivers a white label solution used by payment service providers, fintechs, banks, and other payment institutions, which, in their turn, serve their portfolios of merchant customers. Radar Payments is owned by BPC Group. 


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Keywords: Peter Theunis, Radar Payments, cross-border payments, fintech, money transfer
Categories: Payments & Commerce | Online Payments
Countries: World
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Payments & Commerce






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