A recent survey found that around 55% of Indian respondents send money abroad at least once a month, reflecting India’s increasing interconnectivity where supporting a family member’s education abroad or contributing to living expenses back home is commonplace. Yet, the current system for international payments remains stuck in the slow lane — opaque, expensive, and frustrating for millions. This outdated system to move money around the world simply isn’t keeping pace with the reality of our interconnected lives.
Consumer expectations driving innovation
Change is brewing, driven by consumers who demand a seamless, affordable and transparent experience, whether at home or abroad. Providers, including traditional financial institutions and fintechs who can deliver on this, are the ones who will win the game.
This transformation is being fueled by two key trends. Firstly, governments around the world are recognizing the importance of efficient payments, given their immense potential to support economic growth, trade and financial inclusion. Regulators in the region are pushing to modernize domestic payment rails and taking steps to forge international linkages between these systems — a prime example being the ongoing collaboration between India’s Unified Payments Interface (UPI) and Singapore’s PayNow. Globally, G20 leaders have endorsed the Roadmap for Enhancing Cross-border payments, a plan to address the friction in cross-border payments.
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Secondly, the industry itself is embracing change. Banks can no longer afford to ignore the growing consumer demand for a better international payments experience, however overhauling legacy systems to improve cross-border payments can be complex and expensive. This has opened the door for collaboration with specialist fintechs who are dedicated to solving cross-border payments.
By integrating these fintech solutions, banks can offer their customers their desired speed and cost-effectiveness. This translates to a more satisfied customer base, less churn, and ultimately a more robust payments landscape for the benefit of consumers.
Unlocking transparency: A critical piece of the puzzle
Achieving a truly efficient cross-border payment system also hinges on transparency. Opaque pricing structures are an often overlooked hurdle costing consumers globally billions in hidden fees. A study by Wise found that Indians paid ₹26300 crores (US$3.1b) in foreign exchange fees, of which ₹9700 crores (US$1.1b) were hidden as exchange rate markups.
These fees can often be traced to a lack of transparency in cross-border payment structures. Most people don’t know international transactions typically consist of two parts: the upfront fee and the exchange rate. Most banks and traditional providers don’t exchange money using the mid-market rate as seen on Reuters or Google. Instead, they tend to use a marked-up rate that’s more favorable to them, and the difference between these two rates translates to a hidden fee that consumers don’t realize they’re being charged for.
A lack of transparency has a significant impact on consumer choice. When fees are clear and upfront, consumers are empowered to choose the service that best suits their needs, and this is particularly important for consumers who may not be familiar with payments. Take India, for example, where 88% of respondents were not aware of exchange rate markups — this lack of knowledge would likely lead to them spending more than necessary when it should remain in their pockets.
The future ahead
With international payments serving as a lifeline for millions globally, it’s imperative for industry players and policymakers to prioritize transparent pricing. Clear fee structures and transparent exchange rates shouldn’t be optional features — they should be the norm to put an end to hidden fees. By doing so, we can build the future of faster, cheaper, and more transparent international payments.
The actions we take today will bring us closer to a system where more customers can experience the ease, affordability and clarity they deserve in cross-border transactions.
(By Shrawan Saraogi, APAC Head of Expansion, Wise)
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