In recent years, new challengers such as Wise, Nium and PayPal have revolutionised how payment instructions transfer money cross-border, making them instant, safe, and less expensive for their customers. This forces the two steps apart, creating a two-stage model which in turn creates considerable ‘friction’: 1) the shuffling, buying and selling of money long before the actual transaction needs to be completed, and 2) sending an instruction to exchange ownership of that money. This is because the sending bank needs to first buy a pool of foreign currency and place it with another bank in the country it’s paying to. When making a payment across two countries, the process becomes ‘clunky’. This allows for faster, immediate payments (through banking apps, for example), and countries around the world have implemented immediate low and high value payment services for domestic use.Ĭross-border payments simply don’t happen in the same way. When you move money in any situation, you are doing two things: 1) moving the ‘data’ and ‘information’ about the money, and 2) shifting the actual ‘value’ between one person and another.ĭomestically, this all happens at the same time because the movement of money happens in the same currency and goes through the same clearing system. Marcus Treacher, board director at RTGS.global Here Treacher discusses paving the way for a more efficient and inclusive global economy, and new innovations in cross-border payments. The fintech is a next-generation financial market infrastructure (FMI) built for instant payment versus payment (PvP) settlement and real-time cross-border payments. Marcus Treacher is a board member at RTGS.global. Is it possible to completely change the way money moves around the world by directly connecting the clearing services of individual countries into a global web? Although challengers have revolutionised how payment instructions transfer money cross-border, many still rely on outdated methods. Cross-border payments can be a complex and costly process, as they involve the exchange of different currencies and the use of different clearing systems.
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