International money transfers have a critical role in defining the global economy. Innovation and emerging technologies in the sector can only bring about benefits to the remittance industry. Experts predict that in 2018 certain trends in international payments, such as mobile payments and partnerships between banks and fintech companies will become more prominent.
Three prominent trends in international payment for 2018
Today, with the array of facilities and technologies in place, payments are regarded as a simple step. Consumers demand frictionless experiences coupled with a high level of security. And they also expect to make payments to be seamless and convenient, and if possible, across multiple devices.
Experts are of opinion that the following three trends will dominate the international payment industry this year.
It is no surprise that mobile payment is expected to impose itself in the industry as one of the leaders in international payments options. The recent years have witnessed an increasing dependence on mobile payments in local payment options and the same trend is expected to gain traction this year at the international level. Traditionally, transferring money abroad has more or less been a slow and tedious process, at times even requiring senders and recipients to travel to specific offices for transactions. The transfer would also take days; the recipient could in no way receive the money instantly. However, this inconvenience has been erased thanks to the emergence of mobile money transfers. Today, users can send or receive money directly through a connected bank account within a few simple steps. Funds can be available even within an hour. Mobile international transfers also imply lower transfer fees and an enhanced user experience.
Mobile payments across borders are also being highly influenced by Chinese consumers. The latter is expected to take around 225 million international trips by 2030. The number of foreign travels they are engaging in is expected to grow at the Compound Annual Growth Rate (CAGR) of 7.3% for the period of 2016-2030, according to Euromonitor International. In the wake of this trend, Chinese mobile wallets are also shifting to the West alongside the purchasing power of Chinese residents.
Service providers such as Alipay and WeChat, already offering Chinese consumers a lifestyle-driven app with commerce capabilities, are now boosting the use of these apps abroad. Alipay, which has an estimated 520 million active users, now supports payments in 27 different currencies across 30 countries. The goal behind is to allow Chinese consumers to spend through an app they are familiar with.
Even if Internet payments are not new, they are becoming more popular than bank transfers. In 2018, they are expected to gain even more traction. Online money transfers also offer a level of transparency, rapidity and cheaper transfer rates that are deemed strong features for consumers. They are also faster and cheaper than traditional remittances. Online service providers have mastered how to respond to consumer demand by providing full transfer details with every remittance. They also mention fees and exchange rates, making it easier for users to budget accordingly before any transaction.
Bank and fintech partnerships
To stay afloat amidst the strong competition from online money transfer providers and mobile payment transfer providers, banks are being forced to innovate. Even today, many users still regularly send funds to family and friends abroad through banks, preferring the stability they offer. To stay in the competition, banks are expected to massively partner with alternative service providers and fintech to provider a larger array of payment and transfer options.
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