The Next Decade of Emerging Technology

This article was first published by The Paypers in their Cross-Border Payments and Ecommerce Report 2023-2024. 
The next decade of emerging technology

Richard Harrison, VP of Sales at Freemarket, talks about cross-border payments and the next decade of emerging technology.


How has the globalisation of the economy heightened the significance of cross-border payments? What are the traditional challenges faced in this context?

The globalisation of the economy has made cross-border payments more important than ever. Businesses of all sizes are now operating in a global marketplace and need efficient and secure ways to send and receive money across borders. According to the PYMNTS 2022 report, 40% of small and medium-sized enterprises (SMEs) have increased their international trade. However, only 23% of them were satisfied with cross-border payments.

Traditional challenges in the realm of cross-border payments are numerous, but to name a few:

  • Slow transaction times: they can be sluggish and take days or even weeks to process;
  • High costs: they can be expensive, due to high fees charged by banks and other financial institutions, eroding profitability and deterring international business ventures;
  • Lack of transparency: it can be difficult to track their status, and businesses often pay hidden fees;
  • Complexity: they can be complex, due to different regulatory requirements and currency exchange rate fluctuations;
  • Fraud: they’re more susceptible to fraud, due to the lack of standardisation and interoperability between different payment systems.

From where I’m standing, digital transformation is key to solving these challenges. By embracing new technologies, the financial industry can streamline payments to promote global economic growth.


What are the key trends marking cross-border payments?

One of the foremost trends is the drive for faster, cost-effective, and transparent cross-border payments. Customers and businesses alike are demanding quicker, affordable options that provide greater visibility into the transaction process.

The range of payment methods is expanding rapidly. Beyond traditional bank transfers, we now see a growing array of options, including mobile wallets and cryptocurrencies. These alternatives offer greater flexibility and choice to users, catering to diverse preferences and needs.

In an era where time is of the essence, I think the ability to send and receive money in real time is a game changer. This trend is driving the development of faster payment networks and instant cross-border payment solutions.

I’ve seen integration become increasingly vital. Partnerships and collaborations between fintech firms, banks, and payment providers are on the rise. These integrated solutions offer comprehensive services, combining the strengths of various players to provide seamless and efficient payment experiences.


How are emerging technologies like blockchain, stablecoins, artificial intelligence (AI), and Open Banking expected to influence the future of cross-border payments?

This is where I feel it gets exciting, with emerging technologies poised to revolutionise the payments landscape – they hold the promise of simplifying international transactions, reducing friction, and expanding access to global financial services.

Blockchain technology promises secure, transparent, and tamper-proof transactions. Smart contracts enable automated cross-border payments, reducing the need for intermediaries and associated costs. This innovation enhances the efficiency, speed, and trustworthiness of international transfers.

From speed to accessibility, stablecoins are poised to have a significant impact as they gain popularity and acceptance. We’re seeing companies develop stablecoins that are backed by a basket of fiat currencies, rather than just a single currency – this would make them even more stable and less susceptible to price fluctuations. And, as a relatively new technology, there’s a lot of room for future advancements.

AI: friend or foe? While we need to train it to reflect our context, the potential power to boost productivity is immense. Juniper Research predicts that AI-enabled financial fraud detection and prevention platforms will reach USD 10 billion by 2027. Machine learning algorithms can identify anomalies and ensure regulatory compliance, reducing fraud and error rates.

Open Banking initiatives promote data sharing among financial institutions. This fosters competition and innovation, leading to the development of new cross-border payment solutions that offer better rates, convenience, and transparency.


What role do regulations, competition, and customer demand play in shaping the future of cross-border payments?

Regulatory frameworks are pivotal in shaping cross-border payments. They ensure security, mitigate risks, and combat financial crimes. Emerging regulations often fuel innovation, pushing for enhanced transparency and adherence to compliance standards. For instance, the implementation of anti-money laundering (AML) and know your customer (KYC) regulations spurs the development of more secure payment solutions.

With a forecasted USD 250 trillion market by 2027, cross-border payments are a key battleground. With this comes competition, a driving force for innovation. Fintech startups, traditional banks, and tech giants are vying for a share of the cross-border payments market. This competition motivates the creation of new technologies and pricing models, ultimately benefiting consumers with faster, cheaper, and more user-friendly options.

Customer expectations are instrumental in shaping the future of cross-border payments. People now demand faster, cost-effective, and transparent transactions. As consumer preferences evolve, businesses and financial institutions are urged to adapt, offering solutions that cater to these changing needs.


What are the key takeaways industry stakeholders should consider?

My advice is for stakeholders to remain agile and open to innovation, as emerging technologies like blockchain, AI, and real-time payment systems are reshaping the landscape. I’m really excited about the direction these technologies are taking us in, but understanding their potential applications is crucial for staying relevant and competitive.

Bear in mind that the impact of these changes isn’t confined to local markets. Cross-border payments have a global reach, affecting businesses, individuals, and economies worldwide. Stakeholders should recognise the interconnectedness of financial systems and the importance of harmonising payment standards and regulations across borders.

It's our mission at Freemarket to address these challenges head-on, providing businesses with solutions that optimise cross-border payments and foster global economic growth, while ensuring security and efficiency.



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