TRACKER AUGUST 2019 KBank On Rethinking Bank-FinTech Relations — Feature Story (p. 8) NEWS AND TRENDS P27 taps Mastercard to provide network infrastructure (p. 12) DEEP DIVE What’s fueling the push for real-time cross-border payment solutions (p. 17) 2 | © 2019 PYMNTS.com All Rights Reserved 04 08 The latest efforts by a wide range of Khun Sarintorn, first vice president players to improve payment systems’ of trade finance and international and networks’ interoperability remittance business solutions at Thailand’s Kasikornbank, on how working with FinTechs has expanded the FI’s perspective, making cross-border transfers more transparent 12 17 The latest headlines from around the A data-rich look at cross-border smarter payments landscape payments’ biggest pain points and the solutions that are being developed to enable real-time payment capabilities ACKNOWLEDGMENT The Smarter Payments Tracker is 20 done in collaboration with InstaReM, and PYMNTS is grateful for the Information on PYMNTS.com company’s support and insight. and InstaReM PYMNTS.com retains full editorial control over the following findings, methodology and data analysis. ©© 2019 2019 PYMNTS.com PYMNTS.com All All Rights Rights Reserved Reserved | | 3 PAGE 4 4 | © 2019 PYMNTS.com All Rights Reserved WHAT’S INSIDE Communication is key to successful business relationships between Western Union and the U.K.’s Post Office. The in highly globalized marketplaces. Operations — including collaboration will provide expanded digital internation- the speed of payments — can become complicated when al payment services by making the former’s cross-border two parties can’t exchange information easily. Cross-border transfer platform available to consumers and busi- payments are expected to surge over the next few years as nesses via an integrated online portal from the latter. a result of today’s increasingly interconnected and world- Other efforts to improve cross-border payments have re- wide economy. Such transactions hit $144 billion in value in lied on investing in automation and enabling international 2014 and are on track to reach $240 billion by 2024. payment methods from a growing base of travelers. Many companies have taken note of these strong revenues SMARTER PAYMENTS and are looking to take advantage by making payments DEVELOPMENTS AROUND WORLD as seamless as possible and ensuring that different glob- al systems can work together. Mastercard is once such QR-based cross-border mobile payment solutions provider company, having been recently selected to develop Nordic Citcon, is working to expand its presence in Europe to help bank-backed initiative P27’s underlying infrastructure. P27 local merchants better serve Chinese travelers. Such an was designed to update the Nordics’ aging infrastructures expansion would allow European retailers to accept a wid- with a platform that enables real-time payments and can er range of payment options including Alipay, WeChat Pay receive funds from different markets. Financial institutions and China Union Pay. Citcon’s solution can integrate with (FIs) that use the platform will also be able to access data these offerings, enabling improved payment experiences that can be used to pursue new revenue opportunities. for Chinese tourists. United Kingdom consumers are also gaining easier ac- Acquiring solution provider Credorax is investing in auto- cess to international payments thanks to a partnership mation to make cross-border payments more seamless. © 2019 PYMNTS.com All Rights Reserved | 5 WHAT’S INSIDE The firm recentlypartnered with IT solutions provider Cisco to enhance its network capabilities. The former will imple- ment the latter’s automation, visibility and management system, reducing delays in payment processing and in- voice approval. Fellow cross-border payment solution provider Cambridge Global Payments released its own automated service, Invoice Automation Solution. The fully integrated offering provides a secure process for simplifying vendor payments by automatically pulling data from invoices and PDFs. For more on these and other smarter payments develop- ments, read the Tracker’s News and Trends section (p. 12). ADDING TRANSPARENCY TO OVERSEAS MONEY TRANSFERS Usage of global remittances has increased in recent years as more overseas workers send money home to fami- ly members and friends. Some common pain points have persisted in the remittance market, including not having in- sight into when overseas transfers will arrive and the cost of fees. For this month’s Feature Story (p. 8), Khun Sarintorn, first vice president of trade finance and international re- mittance business solutions of Thailand’s Kasikornbank, explains how the institution collaborated with FinTechs to improve its cross-border transfer capabilities. DEEP DIVE: THE ROAD TO REAL-TIME CROSS-BORDER PAYMENTS FIs and enterprises are facing increased pressure to make cross-border payments fast and seamless as consumers grow used to such products in other sectors. The road to real-time cross-border payments is long and fraught with challenges, however. This Tracker’s Deep Dive (p. 17) in- cludes a data-rich look at how cross-border payments could be more effective. WHAT’S INSIDE 86% Share of corporate treasurers who prioritize efficient payment processes and customer support 14.8B when choosing banks for cross-border Estimated number payments of B2B cross-border transactions that will be processed by 2023 $34B Projected value of the global blockchain supply chain finance market by 2025 7% Global average cost of sending a $200 remittance in Q1 2019, according to World 2,543 Bank data Number of global FIs that made global payments in RMB as of April 2019 FIVE FAST FACTS © 2019 PYMNTS.com All Rights Reserved | 7 PAGE 8 8 | © 2019 PYMNTS.com All Rights Reserved KBank On Rethinking Bank-FinTech Relations Global remittances have been increasing, according to the The World Bank also noted that it is expensive to send latest data from the World Bank. Recent figures indicate money across borders, with the average fee for transfer- that global remittance payments broke records last year, ring $200 at 7 percent in Q1 2019. Senders and recipients with $689 billion in remittances reported — a significant in- may become frustrated if such costs are not revealed prior crease from the $633 billion reported in 2017. South Asia to the transaction. saw some of the highest remittance growth, with trans- Thailand-based Kasikornbank (KBank) recently took steps fers increasing by 12 percent. Remittance payments might to address these and other common pain points in the be on the rise in this region, but common pain points with country’s financial services sector by forging partnerships cross-border money transfers have persisted, including a with FinTechs. KBank’s first vice president of trade finance lack of transparency. This means senders and recipients and international remittance business solution head, can be left wondering when — or if — their funds will arrive. © 2019 PYMNTS.com All Rights Reserved | 9 FEATURE STORY Khun Sarintorn, explained that collaborating with FinTechs “The pain point was that the customer never knew when has caused the bank to reflect on how traditional FIs ad- the money [would arrive], when the beneficiary [would] get dress issues. Sarintorn recently spoke with PYMNTS about the money or the fees,” she said. “We asked, ‘How can we how the company’s partnerships with FinTechs are chang- achieve full-payment so the beneficiary can get the money ing its approach to financial services innovation. in full … and the senders know how much they’re going to be charged and [everyone] knows exactly when it gets there?’” NEW PARTNERSHIPS, NEW INNOVATION PERSPECTIVE The bank worked with its FinTech partners to overhaul the cross-border payment process to be more transparent, Sarintorn noted that KBank provides its customers with a resulting in the launch of its new Global Money Transfer wide range of services, including wealth management, cor- service. The offering allows funds to be received in either porate banking and international financing services. Other real-time or within three business days, depending on the FIs in the region offer similar products, but Sarintorn said transfer’s final destination country. Senders assume re- KBank stands out by embracing FinTechs’ assistance and sponsibility for transfer fees and are alerted by SMS or innovations instead of viewing them as competition. email when the transfer is completed. “We have worked with several FinTechs to understand the The service was well-received among KBank’s custom- way they think and how they manage customer needs,” she ers, Sarintorn noted, partly because customers have grown said. “It’s quite different from FIs like ours, [which] take accustomed to faster payment speeds from domestic time to build and develop their own solutions.” person-to-person (P2P) transfers. These partnerships have opened up new opportunities “People use digital platforms to transfer funds and trust the to better understand how FinTechs address consumers’ platforms already,” she said. “We bring … the opportunity to needs. They have also changed KBank’s perspective on make cross-border payments to them.” innovation. “Previously, we had to start with big things, plan for a long OVERHAULING DIGITAL AND time and then do them one by one,” said Sarintorn. “For PHYSICAL SERVICES FinTechs, they look at customers’ needs right away, find the KBank is continuing to pursue its partnerships with start- pain points … and