Page 26 - Banking Finance June 2025

ARTICLE

The Future of Cross-

Border Payments:

Emerging Trends

Shaping Global Neha Upadhyaya

Chief Manager (Faculty)
Transactions State Bank Foundation Institute
'Chetana', Indore

Imagine a world where everyone has to pay Rs. 6 for every Rs 100 spent on purchasing goods or
services. The same Rs 6 is also to be paid if one sends money to a loved one. In the era of digital
payments and UPI it sounds outlandish, but this is the world of cross border payments and
remittances today.

Abstract the era of digital payments and UPI it sounds outlandish,
but this is the world of cross border payments and remit-
Cross border payments are the lifeline to global pros- tances today.
perity. The international payments system stands in
stark contrast to the domestic payments system in al-
International payments whether in form of remittances,
most all the countries. While domestic payments hap-
trade or grants constitute an important pillar of the world
pen seamlessly in real time with near zero costs, cross
economy. As per World Bank's latest Migration and Devel-
border payments can be a nightmare of rules, docu-
opment Brief, the global remittance flow in year 2023 was
ments, and costs to a common layman. As per studies a massive USD 857 Billion with India being the top recipient
carried out at the behest of G-20, the contemporary of global remittances at USD 120 Billion. What is a cause
Correspondent Banking model of cross border payments for consternation, however, is the revelation by the Report
is fraught with delays, high cost and limited access and that the global average cost of cross border remittances was
transparency. The present paper aims to look at the 6.4% in the last quarter of 2023 which is higher than 6.2%
present model of international payments and evaluate a year ago and way above the Sustainable Development Goal
the latest emerging trends and the innovations in the
of 3%. The rising protectionism and tariff wars is likely to
cross-border payments space that attempt to overcome
further impact migration, international trade and cross
the challenges and transform the future international
border payments.
payments landscape.
The key target of SDG relating to cross border payments is
Introduction the reduction of inequality within and amongst the coun-

Imagine a world where everyone has to pay Rs. 6 for every tries by 2030 and reducing the transaction costs of migrant
Rs 100 spent on purchasing goods or services. The same Rs remittances to less than 3% and eliminating remittance
6 is also to be paid if one sends money to a loved one. In corridors with costs more than 5%."

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