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Five Success Factors of Cross-Border Transactions Discussed at Hong Kong FinTech Week 2023

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Cross-border transactions was a key trend discussed during the Hong Kong FinTech Week 2023, with a focus on better international inter-operability, faster speed, lower cost, higher security and more practical features.

Five Success Factors of Cross-Border TransactionsChart showing success factors

Opinion shared by leaders from private financial institutions, FinTechs and central banks led to identifying the above five key areas to accelerate development and to meet the growing demand, especially from travel, e-commerce, remittance, trading and investment.

The strategy briefing on “Embedded Finance Revolutionising Cross-Border Transactions” published by Euromonitor International in November 2023 predicted that the global demand of cross-border transactions will reach USD40-44 trillion in 2028, with single-digit growth from 2023.

Despite the rapidly growing standardised QR payments and fast payments in individual markets, especially in Asia Pacific, Europe, Middle East and Africa, there used to be a lack of inter-operability.

Inter-operability receives a welcome boost

Exciting news was announced during the conference that Southeast Asia will be linked closer with Greater China, represented by the cross-border QR payment linkage between Thailand and Hong Kong SAR of China from December 2023. Such initiatives will greatly benefit the underserved merchants and residents for both markets, as well as the financial institutions, especially for cross-border travel.

Project mBridge, a multiple-Central Bank Digital Currency (multi-CBDC) experiment platform, gained significant attention during the conference, driving interest in the application of Central Bank Digital Currency in cross-border transactions. Coordinated by Bank of International Settlement (BIS), Project mBridge is led by four central banks: Hong Kong Monetary Authority, the People’s Bank of China, Bank of Thailand, and Central Bank of the United Arab Emirates. Under the guidance of central banks, key commercial banks have been collaborating on this project. For example, Bank of China (BoC) signed a collaboration agreement with First Abu Dhabi Bank (FAB) in October 2023.

In 2022, a pilot trial was conducted among the four central banks and associated 20 commercial banks, completing cross-border transactions totalling more than USD22 million, according to the Bank of International Settlement.

Furthermore, in November 2023, FSTB announced successful trials by Octopus Cards Limited (OCL) and Bank of China Hong Kong (BOCHK) of e-CNY in July 2023. Hong Kong residents are powered by OCL to use Octopus for purchases via e-CNY in mainland China, while mainland Chinese residents are enabled by BOCHK tourists to use BOCHK App with the e-CNY feature in Hong Kong, according to FSTB Hong Kong SAR, China.

Affordability and speed

Consumer-to-consumer (C2C) remittances are typically frequent low-value transactions, taking an average 6-7% commission fee globally. Business-to-consumer remittances (B2C) for salaries used to be dominated by bank wire transfer, taking an average 1-2% commission fee globally. Both used to take several days, increasing anxiety for users and worsening the cash flow. For migrant workers and helpers, that means a great deal, especially amid global inflation. Digital challengers such as Ant Group, Wise, Stripe, and Tencent, among others, have been challenging the traditional remittance business model/companies, providing fast payment in less than 20 seconds while charging less than 1% in fees.


Euromonitor International Consumer Finance system showed that value lost to fraud rose by an 11% CAGR globally over 2017-2022.

Faster and more affordable cross-border transactions are also required to be equipped with higher security to protect against scams, frauds and also money laundering.

FinTechs and payment companies including Ant Group, China UnionPay, Visa and Mastercard, among others, have been enhancing solutions to improve payment security. During the conference, it was also emphasised that mBridge has adopted blockchain to enhance transparency and security.

Practical features

Practical features in key scenarios were also emphasised during the conference, to improve the customer experience. For example, for the C2C remittance scenario, embedding a hyperlink in a message to the remittance recipient in one app can collect payment immediately, instead of juggling between the financial app and the messaging app.

Opportunities ahead

Seamless integration of cross-border transactions into customer journeys is one of the key areas to differentiate in the market competition, balancing data privacy, convenience and compliance. The industry is likely to adopt Financial Technologies such as federated learning to enable encrypted and derived data exchange between business partners, while ensuring no sensitive raw data are shared.

In addition, CDBCs such as e-CNY are still at trial stage, with a limited number of merchants accepting e-CNY payments in Hong Kong SAR and in mainland China, where digital payments are currently dominated by AliPay and WeChat Pay. On the other hand, customer acquisition is as costly as merchant acquisition. The clear benefits of e-CNY must be articulated clearly to merchants, consumers and other key stakeholders.

Stay tuned to the FinTech Topic Page newly launched by Euromonitor International in 2023, for further FinTech insights.

Also read our strategy briefing, Embedded Finance Revolutionising Cross-Border Transactions, for more details on the drivers, key leaders and use cases for embedded cross-border transactions.

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