Updates from Money20/20 USA Conference 2024
Cross-Border Payments: Reducing Fees, Leveraging Stablecoins, and Enhancing Transparency
In the bustling world of fintech, the annual conference has once again proven to be a hotbed of innovation and discussion. This year, the focus was squarely on cross-border payments, with key players like Standard Chartered and Silicon Valley Bank showcasing their solutions.
The conference witnessed a high level of interest in the use of stablecoins and their potential applications in cross-border payments, reflecting recent announcements from companies like Ripple and Stripe. Ripple and Stellar, in particular, had large, attention-grabbing booths at the event.
The primary pricing opportunities for cross-border payment providers in 2024 revolve around reducing high fees, enhancing transparency, and leveraging new technologies like stablecoins and alternative payment methods (APMs) to offer faster, cheaper, and more efficient services.
One such opportunity involves fee optimization. Cross-border card transactions typically include additional fees of 1-3% plus foreign exchange markups around 2-3%. Providers can optimize or reduce these fees, as global remittance fees average 6.2%, well above the UN Sustainable Development Goal target of 3%.
APMs such as wallets, bank transfers, and Buy Now Pay Later (BNPL) options often have lower processing fees compared to traditional card payments, representing a strategic pricing opportunity for providers aiming to attract cost-conscious merchants.
Emerging stablecoin "sandwich" models enable near real-time currency exchange and cross-border transfers within minutes at potentially lower costs. Providers with strong fiat infrastructure can integrate these to offer faster settlement and competitive pricing on international transfers.
Modern platforms that automate currency conversion, compliance, and reconciliation reduce operational costs and hidden fees. Transparent fee structures and real-time tracking can build trust and justify premium pricing through value-added services.
Offering localized payment methods and pricing tailored to regions where cross-border e-commerce and B2B transactions flourish (notably in regions with high cross-border shopping) can capture growth opportunities and optimize fee structures by aligning with local cost standards.
As cross-border payment volumes continue to grow, providers that can reduce costs, speed up settlement, and clarify pricing stand to gain market share and revenue growth in 2024 and beyond.
The conference featured a packed schedule of networking and talks, with discussions around interoperability, instant payments, working capital, blockchain, and inclusion prevalent in sessions related to cross-border payments. Generative AI was another prominent theme, appearing in marketing materials, stands, and discussions.
Mastercard Move, Thunes, Dandelion, and Convera had large presences at the conference, showcasing their solutions and strategies for the cross-border payments market. Several payment providers also discussed the recent use and integration of stablecoins into their treasury functions.
In summary, the primary pricing opportunities involve lowering transaction and FX fees, adopting low-cost alternative payment methods, integrating stablecoin solutions for rapid settlement, and enhancing fee transparency and automation to differentiate services in a highly competitive cross-border payments market.
In the context of the Cross-Border Payments conference, there was a notable interest in utilizing stablecoins and technology to reduce high fees, enhance transparency, and offer more efficient services, as showcased by companies like Ripple and Stellar. As cross-border payment volumes increase, businesses can gain market share and revenue growth by adopting low-cost alternative payment methods, integrating stablecoin solutions for rapid settlement, and improving fee transparency and automation.
