- Of the 7,586 consumers surveyed in Mastercard’s 2022 Borderless Payments Report, the share of consumers who made more frequent cross-border payments last year was 44%, up from 38% in 2020. Similarly, the share who received more frequent payments was 43% last year, up from 36% in 2020.
- Most of those who sent cross-border payments last year (46%) said they used a digital wallet mobile app to do so, while 37% said they used mobile bank apps and 33% turned to money transfer companies’ mobile apps, and just 27% used a bank website, the report said. On the flip side, of consumers who received cross-border payments, 52% used a digital wallet mobile app, 23% used mobile bank apps, 21% turned to money transfer companies’ mobile apps and 17% went through a bank website.
- Of the 3,074 small and mid-sized business representatives surveyed, 72% said digital cross-border payments have helped their business grow and 65% said those payments allowed their business to survive.
Mastercard's second annual Borderless Payments Report suggested international payments have become increasingly necessary for companies’ survival. The May report found that more than two-thirds (69%) of small and mid-sized business respondents said digital cross-border payments had improved their cash flow.
The second-largest U.S. card network company said payment behaviors changed due to the COVID-19 pandemic. "As COVID-19 lockdowns forced consumers and businesses to quickly shift to digital channels, both groups have become increasingly comfortable using desktop and mobile platforms to send and receive international payments," Stephen Grainger, Mastercard's executive vice president for cross-border services, said in a foreword for the report.
On the other hand, Mastercard’s research also pointed to areas of improvement for international payments, issues which could be costing them global clientele. Nearly four in 10 (39%) small and mid-size business respondents said cross-border payments slow their supply chain. About one-third said there wasn't transparency for losses in currency exchange and one-quarter said suppliers refused to work with them due to uncertainty of payment times.
“Seamless international payment services will no doubt remain crucial for keeping families and businesses financially connected to one another — and keeping the global economy moving,” Grainger said in his statement.
The report comes as international payments are expected to rise. Earlier this month, The World Bank predicted that cross-border payments will increase by 3.7% from last year to $802 billion. As the war between Ukraine and Russia rages on, that lender to low- and middle-income countries estimates that cross-border remittances to such nations, including Ukraine, will increase this year by 4.2% to $630 billion.
But as the volume of cross-border payments grows, payment behemoths are experiencing both a rise in global payment transactions and costs associated with the Russian invasion of Ukraine. Visa saw a 38% jump in cross-border payments in its fiscal second-quarter that ended March 31, although the sanctions related to Russia’s Ukraine invasion cost the payment giant $60 million in expenses to close down operations and evacuate its staff in the area.
Meanwhile, Mastercard CEO Michael Miebach said that company's cross-border payments jumped by 53% from last year. While Mastercard in the past earned roughly 4% of revenue from Russia and about 2% from Ukraine, the uptick in other cross-border payments has counterbalanced the loss of that income.
As cross-border business has increased, payment providers have partnered to streamline their international payments operations. In July 2021, Fiserv and Goldman Sachs teamed up to develop a quicker global payment system for suppliers to transact in as many as 125 currencies.
Also, last October, The Clearing House and EBA Clearing partnered with the Society for Worldwide Interbank Financial Telecommunication (Swift) to create a faster, more efficient global payment system. Still, the international payments messaging system operated by Swift was disrupted this year as it was forced by governments to impose international sanctions aimed at punishing Russia for it invasion of Ukraine.