Physical cash as a medium of transaction is slowly receding into history as greater numbers of individuals demand more efficient means of payment.
That's the distinct take from the latest World Payments Report 2018, which predicts that digital transaction volume is on track to grow 46% over the next four years. Digital transaction volume will inflate from 598 billion in 2018 to 867 billion by 2021, says the report.
One key requirement to push the digitalization initiative forward, however, is the willingness of payment service providers to link up with their fellow payment peers, not only in their domestic market, but also across different jurisdictions as well. While domestic payment networks such as PayNow in Singapore and Hong Kong's Faster Payment System have sought to transform payment methods domestically, there is still work to be done in terms of bringing that convenience cross-border.
Nevertheless, some entities have tried to bridge that gap. Singapore and Thailand last year announced that they would link up their respective domestic platform platforms PayNow and PromptPay to allow users to shuttle funds between the two countries with a mobile phone number as the identifier.
Swift, similarly, under its gpi blockchain-based network was able to allow a cross-border payment to be settled via connectivity to Australia's New Payments Platform domestic payment network.
"The platform was designed to separate the underlying infrastructure from products that would sit on top of the platform and that is why we can have an overlay service. We have been focused on things such as creating an API framework that people can use to test and learn about the platform," shares Katrina Stuart, executive manager, engagement at New Payments Platform.
"We started initially with domestic payments, that was our focus, but we knew earlier on that we wanted to support cross-border payments; so our focus has been on how to support the inbound leg of financial transactions. We see a lot of potential in being able to support cross-border payments," adds Stuart.
E-wallets, for instance, also stand to gain significantly from a more inclusive payments environment and avoid being overshadowed by domestic payment networks. Despite being a popular form of payment in China, e-wallets in total only represent around 9% of total digital transactions. In an effort to enhance interoperability, the Reserve Bank of India allowed for the first-time digital transactions between different domestic e-wallets via India's Unified Payments Interface. India has close to 50 e-wallet companies.