Smarter Payments

How Visa’s Using Blockchain Tech To Simplify X-Border Payments

Global payments revenues are at an all-time high, and experts predict that they could even climb to be a $2 trillion industry by 2020. Cross-border payment revenues currently account for approximately $200 billion, a significant slice of the payments pie. Currently, there are 0.7 international transactions per capita every year, up from 0.5 in 2014.

Despite the increase in the market, international payments still face significant difficulties. Differing regulations between sending and receiving countries are challenging to navigate, and cross-border transactions can take up to several days to complete as they are routed through intermediary banks. Emerging technologies, such as distributed ledger technology (DLT), increased international commerce, and new players like TransferWise, Alibaba and Amazon exacerbate these issues by introducing competition.

In the July Smarter Payments Tracker, PYMNTS explores how the financial services landscape is shifting to upgrade existing payment infrastructures, and how players in the industry are tackling the various problems associated with digital payments.

Developments From Around The Smarter Payments World

Amazon Web Services (AWS) recently partnered with blockchain software firm Digital Asset to improve the latter’s Digital Asset Modeling Language (DAML) interoperability. The collaboration will allow DAML to work with several different blockchain networks, including Hyperledger Fabric and Corda. Digital Asset has made several moves to enhance DAML, including introducing Hyperledger Sawtooth compatibility and a partnership with cloud computing developer VMware.

Open banking platform developer Token is also looking into smarter payments. The startup recently secured $16.5 million in a funding round led by Opera Tech Ventures, the venture arm of investment bank BNP Paribas. The developer raised $18.5 million during a 2017 Series A funding round, indicating the financial industry’s interest in seamless payments. Token plans to use the money to further develop TokenOS, an open banking platform that provides turnkey revised Payment Services Directive (PSD2) compliance and an open banking application programming interface (API).

Overseas developers are venturing into smarter payments solutions as well. Indonesian bank CIMB Niaga and Singaporean mobile payments provider Liquid Group have partnered to implement cross-border quick response (QR) payments between their respective countries, starting with merchants at Singapore’s Changi Airport.

For more on these stories and other smarter payments developments, read the Tracker’s News and Trends section.

Could Regulatory Compliance For Cross-Border Payments Be Simpler?

Financial institutions (FIs) often struggle with cross-border payments, largely due to the spiderweb of governmental regulations. Compliance often results in slow processing times, causing inconvenience for customers. For this month’s Feature Story, PYMNTS spoke with Vikram Modi, Visa Direct’s global platform and solutions head, on how the company faces these hurdles, and the steps it’s taking to improve cross-border transactions.

Deep Dive: Interoperability Initiatives For Cross-Border Payments

Payments interoperability would allow banks and consumers to seamlessly pay for goods and services no matter what providers they use, but instituting interoperability is a significant challenge. This goal can be met, however, if governments, corporations and FIs worked together. This month’s Deep Dive explores how interoperability can be reached, and the public and private programs that are currently underway to achieve it.

About The Tracker

The Smarter Payments Tracker, a PYMNTS and InstaReM collaboration, is a go-to monthly resource for staying up to date on global payments landscape developments. The Tracker explores how smooth payments flows can offer ecosystems improved speed, security and insights.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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