The panel session on “Evolving Business Models in Cross-Border Payments” delved into the complexities and advancements within modern cross-border payments.
Leo Lipis, CEO of Lipis Advisors, moderated the final panel at EBAday, engaging with experts including Akshat Saharia from HSBC, Anastasia Serikova from Visa, Emanuela Saccarola from Citi, Sanjeev Bhatti from BNY, and Steve Naudé from Wise Platform.
Focusing on low-value payments under $100,000, the discussion highlighted the different consumer expectations between high- and low-value transactions. Naudé emphasized that while security is paramount for high-value payments, low-value transactions must be seamless, affordable, and instant.
Saccarola noted the increased complexity in cross-border payments, explaining that the traditional wire transfer method has evolved to include various options such as instant payments, cards, and digital assets. With around 200 countries, there are approximately 20,000 combinations to consider in this landscape.
A poll showed that 66% of participants’ banks utilize RTGS for Euro cross-border payments, with 12% using real-time payments and 8% opting for batch processes.
Serikova addressed misconceptions about value segmentation, indicating that even retail payments can be high-value. Moreover, evolving expectations in B2B cross-border payments mirror those of consumers, influenced by the burgeoning gig economy.
Bhatti noted the growing complexity, with new instant payment schemes and blockchain solutions emerging. He advocated for organizations to collaborate with partners for effective transaction management, rather than attempting to handle everything internally.
In another poll, respondents cited inertia and complexity of change (37%) as the biggest barrier to altering operating models in low-value cross-border payments, followed by regulation (22%) and scheme limitations (18%).
Saharia pointed out the challenge of aligning central banks and regulators to develop a unified fraud prevention framework across borders. While recognizing the ongoing efforts to enhance traditional correspondent banking, he emphasized the need for clear objectives in the evolving payment landscape.
Naudé highlighted the importance of selecting appropriate partnerships based on infrastructure quality and payment reach within specified timeframes. Serikova also stressed the significance of compliance in partner selection, balancing global coverage with local expertise.
Looking ahead, Bhatti discussed the crucial role of EBA in fostering harmonization and early risk detection as the payment landscape evolves, underscoring the necessity for swift communication regarding risks within the community.