Cross border payments part 4: opening the door to adjacent markets

The cross border payments market is big. As per McKinsey, global payments revenues were $1.9 trillion in 2018, a big part of most bank’s transaction banking revenues.

What happens when cross border payments moves to free?

It is possible that cross border payments price comes down by 90% and volumes increase by 10x ie the total revenue remains the same. However, the friction difference between very cheap and free indicates that cross border payments will become free. A price of even $1 creates friction; this will only change when micropayments goes mainstream.

So the more likely scenario is that somebody gets to scale by offering cross border payments for free and monetizes by becoming a platform for the adjacent markets.

Which is good news for upstarts and bad news for incumbents (such as banks) who are playing defense.

Parts 1 and 2 of this 4 part series on cross border payments described a beautifully broken market. Beauty is in the eye of the holder. For customers, cross border is an ugly mess of cost & hassle. For entrepreneurs that is a a beautifully broken market. For incumbents it is a nightmare. Part 3 looked at the disruption to this market coming from Stablecoins. This concluding Part 4 looks the markets adjacent to cross border payments that will open up to any company that offers a free service.


When cross border payments are free and securities are tokenised what the IMF defined as Concurrent Delivery vs Payment becomes instant. I send you a security (Delivery), you send me cash (Payment). Any time lag between Delivery and Payment creates huge costs and processes to  manage risk. When both are done concurrently everything in the global capital markets will change.

Trade Finance

Analog Trade Finance sounds like it comes out of the Victorian era with wonderfully arcane terms such as Bill Of Lading and Forfait.

This is ripe for disruption by Digital Trade Finance, which will be enabled by free cross border payments.

Digital Trade Finance has big submarkets such as Supply Chain Finance, Payables Finance, Receivables Finance.

Offshore vendors

This could be a manufacturer or process outsourcer or individual offering personal services. They all need to get paid and their currency is different from the customer.


If you want to help somebody in a poor country, you have to get the money to them. Cross border payments is key to the Philanthropy market.

Bernard Lunn is Editor and CEO of Daily Fintech and author of The Blockchain Economy

Daily Fintech’s original insight is made available to you for US$143 a year (which equates to $2.75 per week). $2.75 buys you a coffee (maybe), or the cost of a week’s subscription to the global Fintech blog – caffeine for the mind that could be worth $ millions.

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