Can transferring money overseas ever be as speedy and easy as paying for a meal in your local restaurant using real-time payments systems or wallets such as DBS PayLah!?
Imagine a world where consumers, businesses and institutions enjoy the same experience in every cross-border payment they make as they do domestically: with the same speed, efficiency, cost-effectiveness and transparency.
Though speedier and seamless cross-border payments will require a few mindset shifts to realise, it is not a far-fetched dream, especially so in Asia where a fast-growing digitally savvy middle class has led to the ubiquity of digital payments.
A study by Deloitte found that two-thirds of global digital wallet consumer spending in 2023 came from Asia, at a combined US$9.8 trillion. Moreover, the region boasts the highest digital wallet penetration rate: half of its point-of-sale transactions were made using digital wallets as compared to the global average of 30 per cent.
Typically, cross-border payments are less speedy, efficient and transparent as compared to local payments. It routes through one or a series of correspondent banks while encountering currency cut-off timings and banking holidays. This often results in such transactions taking up to several days to process, while fees may be high and not fully known to the sender upfront.
These pain points are felt across all walks of society - from migrant workers who need to remit money to their families back home, to large corporations managing payments, collections and cash positions across different time zones and currencies.
Beyond the traditional correspondent banking approach described above, multiple payment platforms, including those from banks, have emerged in recent years. However, this has also led to a more fragmented cross-border payments landscape.
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