Digital Wallets Win Again: Now Cross Border Transfers
Banks' reaction is predictable: "too complicated"
Global remittances create $794 billion in cross-border flows, and if consumers had their choice, they would all conduct their transactions through digital wallets.
Some 42% of consumers in this limited poll prefer digital wallets for making cross-border payments, and who can blame them?
Digital wallets are faster and more convenient than going to a money transfer agent or using most bank transfer software.
So what’s the holdup? The first reason is interoperability, as global wallet standards differ. Even when using the same wallet, such as Apple Pay, sending money from country A to country B can be fraught with regulatory issues.
The other holdup is far more amusing and likely the root cause.
The survey revealed that an astounding 51% of financial institutions (banks) have decided that digital wallet transactions for cross-border payments are “too complicated.”
You can’t make that up!
If there is ever an example of how disconnected from reality banks can be, this is it.
👉Cross border is the future:
🔹 70% of consumers typically engage in cross-border transactions with other consumers through remittances, while 77% of businesses generally engage in business-to-business (B2B) cross-border transactions with suppliers.
🔹 Digital wallets have potential to bridge coordination gaps, as 64% of digital wallet cross-border payers coor-dinate to use the same wallet as the receiver.
🔹 26% of digital wallet cross-border payers who send to three or more countries prefer to use digital wallets, but strict regulations and lack of availability are prominent roadblocks
🔹 U.S. consumers sending cross-border payments are 92% more likely to cite speed as a reason to use digital wallets compared to bank accounts.
🔹 62% of banks ready to innovate are exploring partnerships with FinTechs
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