Money transfer solutions have become a vital empowerment tool for people, businesses and governments around the globe. The demand for digital cross-border transfers has skyrocketed since the pandemic. And with the world now experiencing increased migration and the displacement of populations, a sea change in the way people work, together with major economic challenges, means it has never been so important to deliver customer-centric money transfer solutions.
According to the World Bank, the amount of money sent home by migrant workers surged to nearly $800bn in 2022 becoming particularly critical for people in low and middle-income countries, where in some instances this represents the biggest contribution to GDP.
Elsewhere, we’ve seen governments utilise money transfer solutions to quickly send aid to citizens after natural disasters and businesses utilise them to open up new markets. Regardless of the reason, these types of transfers serve as a lifeline in many sectors.
Money transfer solutions are therefore one of the most important empowerment tools supporting people, businesses, and governments in an uncertain environment. What’s clear is that people’s responses to the changing state of the world are often powered by money transfer technology.
Shaping the future of payments, together
As a leading innovator in the payments and technology space, Mastercard is committed to listening to customers and their end users to shape the future of payments based on an understanding of their evolving needs and aspirations.
[Payment leaders and their customers] want a safe and seamless way to move money from one place to another, regardless of purpose or geography
To ensure we are addressing the right needs, earlier this year we conducted a series of one-on-one interviews with representatives from financial services companies, digital brands, and their end customers. This in-depth research sought insights into payment leaders’ and end customers’ requirements and preferences for money transfer solutions, and their current use of tools when transferring money domestically and internationally.
Our report – Designing the next generation of money transfer solutions – explores the key findings across a range of themes, including reach and user experience, transparency and pricing, and security and trust.
What was clear is that payment leaders and their customers are not concerning themselves with the mechanics of “disbursements” or “remittances” – they just want a safe and seamless way to move money from one place to another, regardless of purpose or geography.
Cost and security remain top priorities
Reducing costs is front of mind for many payment leaders as they battle unprecedented economic conditions, with the challenge of managing their liquidity position in multiple currencies and maximising their cash flow to ensure they meet their settlement obligations.
Businesses are also keen to offer competitive pricing to their customers, however around 45% of SMEs we spoke to for our 2022 Borderless Payments study told us that current cross-border payment systems provide poor exchange rates, high fees, or both. Meanwhile, around a third of consumers say digital platforms are not transparent enough about the cost of transfers, and how much money will be received.
Businesses also deem it crucial their partners provide assurances of the security measures in place when it comes to managing their payments, for both domestic and international transactions. With 45% of SMEs and 42% of consumers fearing they may become victims of fraud when using digital cross-border payment networks, trust is a major consideration across use cases, whether it is a consumer looking for a viable option for peer-to-peer payments, or a business operating internationally.
Addressing the pain points
Tackling these pain points is becoming a greater priority for more and more financial services companies. They want to provide their customers around the world with real-time capabilities and multiple payment options, preferably through a single connection experience. They are also looking for more transparency in fees and timing and for stronger, more visible security measures in line with key regulatory requirements across different geographies.
Mastercard is committed to supporting companies in achieving this goal. Our solutions enable access to 95% of the world’s banked population, and 7.5 billion endpoints, including bank accounts, cards, and digital wallets. Of the 2.5 billion card endpoints we support, nearly 2 billion can receive funds in near real time.
By harnessing these learnings from payment leaders and their end customers, we can further guide the product development of modern money transfer solutions that solve critical pain points and help shape a future where money transfer solutions work for everyone.
