Money20/20 Panel: Cross-Border Payments are Poised for Breakthrough (Oct. 26, 2015)
Cross-border payments providers looking to drive innovation should focus on solving problems in consumer use cases and getting regulators to help improve—not impede—technology development to streamline global remittances, payments executives said during an introductory panel at Money20/20 in Las Vegas on Sun., Oct. 25.
New technology holds the potential to disrupt cross-border payments, an industry currently mired in time-consuming, manual processes to protect against fraud and money laundering, proposed Halsey Minor, founder and chairman of Uphold, a company exploring new technologies for global remittances. Ideally, he said, it should be possible to build platforms enabling “any person with any device to send money at any time instantly at no cost across borders.”
That vision is great, but it’s unrealistic, noted Hikmet Ersek, CEO and president of Western Union. “Nothing is easy, and actually moving funds that are good and clean into a system, free of fraud and money laundering, takes a massive amount of effort.” Western Union currently is making progress in linking payments networks to streamline the process of enabling fast, secure cross-border payments, he added.
Zeroing in on the specific needs of consumers sending and receiving money is a fertile area for technology development to improve cross-border payments, noted John Kunze, CEO of Xoom, which PayPal acquired earlier this year. “The biggest thing that’s going to happen in cross-border payments over the next couple of years is innovations around the consumer experience . . . and using technology to solve financial services problems locally,” he predicted.
Regulators actually could become a powerful force in driving innovation in cross-border payments, suggested Pam Patsley, chairman and CEO of MoneyGram International. “I’m hopeful that a big disruptor would be regulators beginning to really understand this industry, realizing that regulation has perhaps gone a step too far, and it’s beginning to hurt financial inclusion,” she said.
It’s hard to predict who the winners and losers will be, but there’s no doubt cross-border payments will be a big area of investment and development in the next several years, Zilvinas Bareisis, a senior analyst with Celent, told Paybefore. “Refining the use cases for consumers and figuring out what the role of regulators will be are the keys for companies taking the lead in this arena,” he said.