Top 100 Transnational Payment Firms Disclose Industry Transformations and Obstacles
The cross-border payments industry continues to evolve, with North America leading the pack and over 40% of companies operating out of the continent. However, the landscape is shifting, as the 2023 Cross-Border Payments 100 market map reveals.
The map, now in its fifth year, highlights several key trends and insights around female leadership, challenger firms, and emerging markets.
Female Leadership
There is a growing emphasis on supporting women entrepreneurs and celebrating female leadership in the cross-border payments space. Mastercard, for instance, has launched new solutions dedicated to women entrepreneurs and initiated programs promoting gender equality and inspiring stories of outstanding women leaders, particularly in Latin America and the Caribbean regions.
Challenger Firms
Challenger companies in cross-border payments are expanding alternatives to traditional banks via digital rails, stablecoins, and blockchain technologies. While the market share of stablecoins remains low (less than 1%), their total addressable market is much larger and concentrated around emerging markets. These companies target underbanked populations with solutions that include credit access and more transparent pricing, directly competing with opaque and slower traditional payment methods.
Emerging Markets
Emerging markets are crucial to growth in cross-border payments, as many of the largest margins come from flows either from developed to emerging markets, within emerging markets, or from emerging markets outwards. This creates opportunities for new payment corridors and enhancements in speed and transparency. Mastercard's focus on Latin America and the Caribbean underscores the importance of these regions, with innovations aimed at improving financial inclusion and payment acceptance.
However, regulatory and technical challenges remain, such as the adoption of CBDCs and stablecoins in these markets. Linking real-time payments systems is viewed as a promising avenue by central banks.
Market Consolidation
Consolidation in the market over the last few years has led to many smaller companies being acquired by bigger players in the space. The number one reason for a company being taken off the top 100 list between years was that it had been acquired by a competitor. Companies in a position to make acquisitions are generally larger and more established than the smaller players they acquire.
The Future of Cross-Border Payments
Despite progress, there remains a serious lack of women in senior leadership positions in the cross-border payments industry. Companies must review areas such as hiring practices and workplace culture to ensure women looking to reach leadership positions can do so.
The map also shows a contraction of younger companies in 2023 compared to 2019 in the cross-border payments industry. This could be due to the state of crisis crypto has been in throughout 2022 and into this year, as reflected by the drop off of crypto companies in the top 100.
However, the geographical spread of companies in the top 100 is now more dispersed than ever before, with hot spots cropping up in parts of South America and Western Africa. This indicates that emerging markets are taking up more share of the cross-border payments industry than ever before.
In summary, the market map shows a dynamic cross-border payments landscape increasingly driven by female leadership initiatives partnered with digital challenger firms targeting untapped emerging markets. These factors combined promise to accelerate the industry's modernization, inclusion, and market expansion in the coming years.
[1] CB Insights. (2023). The 2023 Cross-Border Payments 100. Retrieved from https://www.cbinsights.com/research/report/cross-border-payments-100-2023
[2] Mastercard. (2023). Mastercard Empowering Women Entrepreneurs. Retrieved from https://www.mastercard.us/en-us/vision/empowering-women-entrepreneurs.html
[3] Bank for International Settlements. (2023). Central Bank Digital Currencies: Cross-border payments. Retrieved from https://www.bis.org/publ/qtrpdf/r_qt2303a.htm
- The cross-border payments landscape is being shaped by a growing emphasis on female leadership, with Mastercard's new solutions for women entrepreneurs and programs promoting gender equality setting an example, particularly in Latin America and the Caribbean.
- The cross-border payments industry is increasingly being influenced by challenger firms leveraging digital rails, stablecoins, and blockchain technologies, targeting underbanked populations in emerging markets, particularly those with solutions for credit access and more transparent pricing.
