Over the past few decades, the world has become far more interconnected, bringing billions more people online. According to the UN agency ITU, in 2005 the number of internet users stood at 1 billion globally, but by 2024, it had reached 5.5 billion. And as more of us have gained online access than ever before, initially through dial-up internet, then broadband and, later, 5G connectivity, we’ve gained entirely new ways of reaching beyond our own borders, allowing us to connect and do business on a scale not previously possible.
This is true in Western nations such as the US, but it is also true of emerging market countries. Today, companies big, small and even micro, in regions such as West Africa, Southeast Asia and Latin America, are increasingly looking not just within their borders for business, but are buying and selling internationally in greater numbers than ever before.
Meanwhile, the number of people living and working somewhere other than their place of birth also continues to rise. According to the UN’s International Organization for Migration, 2.8% of the world’s population were migrants in 1990, but as of 2020, this stood at 3.6%.
All of this is translating not only into a smaller world, but one where money moves faster, further and in greater quantities. According to data from my company FXC Intelligence, the total value of the world’s non-wholesale cross-border payments, which covers all forms of business and consumer payments made internationally, reached $39.9tn in 2024. That’s a 52% increase on 2016, when the total stood at $24.8tn, but there is still far more growth ahead: in 2032, we project it to reach $64.5tn.
Headwinds move cross-border payments rather than stifling them
Central to this ongoing growth is a simple fact: in times of macroeconomic uncertainty, the headwinds that cause companies to warn of challenging years ahead typically don’t erode cross-border payments, but instead shift their flows in different directions.
Recent history has shown us that when restrictions on trade between two markets occur, be it through policy, operational constraints or other factors entirely, those flows generally don’t vanish, but instead shift to different markets. If one country can’t provide an importer with what they need, they will look to another, with the associated payment flows moving to the respective currency corridor in the process.
Even major macroeconomic events do not present as much of a headwind as might be expected. In April 2020, just over a month after the World Health Organization had declared Covid-19 a pandemic, the World Bank predicted what it described as the “sharpest decline of remittances in recent history” as a result of the loss of earnings caused by the pandemic. However, the reality proved to be quite different. Within months, the World Bank was reporting that its expectations had been more extreme than the reality, and ultimately while global remittance flows did decline slightly in 2020 versus 2019 ($435bn versus $457bn), this was a smaller drop than between 2014 and 2015 and had completely rebounded by the following year.
This smaller-than-expected contraction was the result of priorities among migrants. While initial projections had assumed that remittances would simply scale down with migrant incomes, in reality many opted to protect the money they were sending home from reductions by cutting more sharply elsewhere.
Growing opportunities for the cross-border payments industry
With significant resilience and growing demand, the total addressable market (TAM) of the cross-border payments industry is only set to continue to grow, regardless of any global shocks that may occur over the coming years. However, this does not mean that every company operating in the space’s income will too.
The last few years have seen continued growth but significant shifts in certain verticals and geographies. During the pandemic, ecommerce soared while travel contracted, and changes in global demand have seen currency pairs that were once considered exotic move into the mundane for global trade.
This is therefore an industry that poses immense opportunity, but also one where it pays to be flexible and responsive. Companies that can flex with changes in global demand have fared better than those reliant on a relatively small number of verticals and regions over the past few years, and the same is likely to continue to be true in the future.
However, those that are complacent may see their positions usurped. Some banks, for example, have seen their historically dominant share of business-to-business cross-border payments slowly eroded in favor of fintech players who have tailored their services to the changing needs of global businesses, while in the consumer space those that have long-standing retail empires have had to shift to respond to digital challengers.
As global payments continue to grow, greater numbers of players beyond the fintech space are also embracing the opportunities in cross-border payments, either through white-label services provided by infrastructure providers or through their own in-house systems.
With global opportunities shifting, new corridors, markets and expectations are emerging at a rapid pace, and with it cross-border payments flows will only rise further. Who will earn revenue from those flows, however, remains to be seen.
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