Collaboration between banks and fintechs has driven considerable innovation in the international payments market in recent years.
In the not-too-distant past, oversight of cross-border payments – in terms of their status and the associated handling fees – was limited and updates were difficult to access and slow to arrive.
This was, in part, due to the need for often long chains of correspondent banks to shift the money from a region the payer’s bank operated in to one outside its direct network. This created a process-heavy and costly operation, with each bank incurring its own paperwork and fees.
As a result, no single institution could have oversight over the whole chain, resulting in a lack of transparency and no easy way to know when the payment would be settled. One of the major pain points was a lack of clarity over the cost, where the recipient ended up with less money than expected due to fees deducted along the way.
Thankfully, international payments have come a long way in recent…