Cross-border payment trends for banking in 2024: An overview of the year through statistical insights
In 2024, the banking sector has witnessed a significant surge in cross-border payments, driven by digital transformation and technological advancements that have improved efficiency, speed, and user experience.
Performance and Trends -----------------------
Key payment infrastructures, such as the European Central Bank's TARGET Services, have seen an increase in transaction volumes. The T2 large-value payments service recorded its highest annual traffic since the euro's introduction, with nearly 108 million transactions in 2024. Instant payments through TIPS grew fivefold to approximately 1.35 billion transactions, highlighting an ongoing push towards real-time cross-border settlements in Europe.
Central banks in 2024 view linking real-time payment systems as the most promising avenue to improve cross-border payments, surpassing the earlier prominence of CBDCs (central bank digital currencies) and stablecoins. While digital currencies remain of interest, legal and technical challenges limit their immediate impact on solving cross-border payment complexities.
The digitization of remittances and cross-border payment processes is reducing operational costs and processing times substantially. Platforms such as Inswitch provide API-driven solutions that enable banks and fintechs to offer more efficient, flexible, and scalable cross-border payment options. These innovations are transforming user experiences by enabling fast approvals and multiple payout options.
The cross-border payment market size continues to grow robustly. In 2024, consumer-to-business (C2B) cross-border payments had a total addressable market (TAM) of $4.5 trillion, projected to rise to $7 trillion by 2032 at a compound annual growth rate (CAGR) of about 5.8%. Consumer-to-consumer (C2C) payments accounted for around $2 trillion in 2024.
Banks Driving Key Changes --------------------------
While specific banks are not named in the sources, the infrastructure providers and financial institutions integrating with services like TARGET in Europe, and those adopting API-driven digital platforms such as Inswitch, are evidently leading innovation in cross-border payments.
Central banks themselves, by fostering linked real-time payment systems and enabling broader access for non-bank payment service providers, play a pivotal role in advancing cross-border transaction efficiency and integration.
Key Players and Developments ----------------------------
- Caixabank created a 100-strong multidisciplinary generative AI task force in 2024. - BNY Mellon made 17% of its investments in cross-border payments-related organizations over a five-year period. - Banks are increasingly looking beyond correspondent banking services to improve their offerings and better compete with enterprise-focused B2B payments players. - Banks accounted for around a third of consumer remittances in 2023, compared to a larger share in B2B cross-border payments. - Goldman Sachs is exploring the spin out of its blockchain platform GS DAP to broaden its applications and enable it to form part of an industry-wide distributed ecosystem. - Citi has reported an 8% rise in cross-border transaction value in its most recent earnings, putting it on course to surpass its 2023 full-year performance in FY 2024. - DBS's suite of blockchain-based banking services, DBS Token Services, went live in October 2023, including features such as instant, 24/7 real-time settlement. - Citi's digital ledger technology-based platform, Citi Token Services, moved from a pilot program to a live commercial solution in October 2023. - Raiffeisen Bank announced an approach to incorporate AI into its regulatory compliance systems in 2024. - BBVA created a training program for its top executives focused on using genAI to improve productivity in 2024. - J.P. Morgan relaunched its blockchain platform, Kinexys, in Q4 2023, handling around $2bn transaction volume a day. - Non-bank players are taking share from banks in the B2B cross-border payments market. - Standard Chartered is partnering with B2B2X platform Mastercard Move to enable cross-border payments to Mastercard debit cards. - Standard Chartered aims to increase the percentage of its Corporate and Investment Banking segment's income from cross-border payments to 70% in the "medium term". - Swift launched an AI-based anomaly detection service to help banks combat fraud in 2024. - Morgan Stanley launched an AI-powered assistant to support its institutional securities staff in 2024. - UBS successfully piloted its own blockchain platform, UBS Digital Cash, in November 2023, including cross-border transactions with multinational clients.
In summary, banks in 2024 are performing strongly in cross-border payments by leveraging digitization, real-time payment system linkages, and multi-currency settlement capabilities. The key drivers of change include central banks promoting infrastructure upgrades and fintech partnerships enabling API-driven, user-centric payment solutions that reduce cost and speed up processing. This positions banks and payment service providers at the forefront of a rapidly expanding global cross-border payment market.
Businesses in the finance sector, particularly banks, are capitalizing on market sizing opportunities within the global cross-border payment market, which is projected to reach $7 trillion by 2032. This growth is attributed to technological advancements that have led to improvements in efficiency, speed, and user experience, notably in real-time cross-border settlements and the digitization of remittances. Financial institutions are experimenting with innovative solutions like API-driven digital platforms and blockchain technology to offer more efficient, flexible, and scalable cross-border payment options, ultimately transforming the user experience.
