A staggering 771 million people made cross-border transactions between June 2023 and June 2024.¹ Yet while consumers are making more cross-border transactions, for too many these transactions are still too slow, complicated and costly.
A closer look at remitters
International migration to seek work abroad is increasing, with the market predicted to grow to over $1 trillion by 2028.² This demand is driving an increase in remittances sent and received.² Yet those who sent or received remittances, younger generations, and consumers in the UAE, the Philippines, Mexico, and Brazil are more likely to have stopped using a payment option due to concerns about fraud.³
Security is consistently the top priority across all regions and among those engaging in travel (63%), ecommerce (62%), and remittance (59%) transactions.³ Of the 6,500 consumers surveyed, 90% expect stringent fraud and security measures to be in place and 75% of Gen Z have STOPPED a cross-border payment for fear of fraud.³ More specifically, 79% of the consumers surveyed in Mexico and 94% in United Kingdom, agreed that safety measures, like payment tracking information or confirmation of payee, are now expected as standard when making transactions across borders.³
Reputational risk is very real
Although security is consumers’ number one concern,³ many expect fintechs and banks to already have security measures in place – assuming that their cross-border transaction will be as safe as their domestic ones their provider already offers. So, it’s not surprising that any negative experiences consumers have, or hear anecdotally, can heavily affect their likelihood of using that provider to move money again.
Consumers are not, and nor should they be, experts in the complexities of cross-border money movement. They just want their money sent safely and expect their provider to do that for them. When security and trust are the overriding issues of concern for consumers, once that trust is gone, it’s a challenge for banks and fintechs to regain that trust. Or worse, the customer will leave completely and try another competitor given that there are virtually no switching costs to do so.
Consumers need a safe port in the storm
For consumers, security concerns impact nearly every transaction they make. Building robust compliance tools and using machine learning and AI to understand spending habits and pinpoint fraudulent transactions, are key to ensuring security. This is especially critical for fintechs as they compete for consumers’ loyalty with incumbent retail banks who have a trusted brand. The fintechs (and banks) that upgrade their money movement solution with strong security measures hold the key to bridging the gap between consumer expectations and reality. With an upgraded money movement solution like Visa Direct, providers can offer consumers the security they clearly want and expect, with the payment options and speed they don’t know they want. Through doing this, fintechs and banks can drive loyalty from existing customers, while attracting new ones.
To learn more about consumers' preference in cross-border payments, download the whitepaper.
More Visa Direct blog posts
Read more from experts who discuss how Visa Direct can help meet expectations around global money movement and evolving digital payments.
DISCLAIMER
Visa Direct clients and participants should always consult and seek approval from their internal compliance teams on fraud controls and processes. Visa Direct clients and participants are solely responsible for their own compliance with applicable laws and regulations.
- ”Unlocking the future: banking on cross-border payment habits”. 17 June – 2 July, 2024. 13 countries: U.S., Canada, Brazil, Mexico, UK, France, Germany, Sweden, Australia, Hong Kong, Philippines, Singapore, UAE. All studies, surveys, research, and materials owned or commissioned by Visa shall not be used, reproduced, copied, or recirculated without the prior consent of Visa. Calculated by applying the percentage of the general population making cross-border transactions to the current population size in each market. Calculated by applying the percentage of the general population making cross-border transactions to the current population size in each market.
- ‘Key Trends in Cross-border Payments 2024’ Global Data (2024, September).
- ”Unlocking the future: banking on cross-border payment habits”. 17 June – 2 July, 2024. 13 countries: U.S., Canada, Brazil, Mexico, UK, France, Germany, Sweden, Australia, Hong Kong, Philippines, Singapore, UAE. All studies, surveys, research, and materials owned or commissioned by Visa shall not be used, reproduced, copied, or recirculated without the prior consent of Visa.