Esend money to a foreign country, buy goods on e-commerce platforms from a neighboring country, pay an invoice to a supplier who does not use the euro: cross-border payments are multiplying as globalization deepens, and are set to increase even more, since it is estimated that their volume total is expected to approach $250 trillion by 2027.
However, for many, these transactions remain too expensive and too slow, if not simply inaccessible. Thus, according to World Bank data, the average cost of a money transfer for a foreign worker, from his host country to his country of origin, is around 6% of the total cost for 200 dollars exchanged, with costs that can go up to 15% for certain underserved regions!
However, these remittances (or remittances) are often regular and of a sufficiently low amount for the bill to quickly become exorbitant. Furthermore, anyone who has ever used the services of companies such as Western Union or MoneyGram knows that the details of fees are often opaque, and that this type of transaction takes much longer than so-called domestic transactions (within one and the same country).
A boon for innovative players
In fact, the financial system is still largely based on national bases, and banks venture less and less to provide accounts in these countries. In a context of low bankarization of the populations, the investments are not or little profitable.
Above all, the resurgence of international terrorism implies that financial players prove that their channels are not used to finance said terrorism or money laundering: so many legal constraints that deter them from investing. Result: access to means of payment through traditional channels remains difficult, and exchanging money can be a crossroads.
Cross-border payments are the great forgotten of globalization. A godsend for innovative players, like Wise or M-Pesa in Kenya. They benefit from the wave of digitization that preceded their arrival: mobiles and other e-wallet make it possible to carry out transactions quickly without opening a bank account. The advantage, too, of holes in the racket in terms of regulation, current legislation struggling to adapt to these new models which are therefore less constrained than those of traditional players.
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