Visa: Cross-Border Payment Habits Reveal Market in Flux
The cross-border payments market is undergoing structural change as consumers experiment with different payment methods whilst seeking a primary provider, according to research from Visa.
A survey of 6,500 consumers across 13 countries reveals that 77% use multiple payment methods for international transactions, with the average consumer using four different payment methods. Only 16% have a default payment method for cross-border transactions.
Market Evolution
“The way payments are made has changed more in the past five years than in the last 50,” says Ryan McInerney, CEO of Visa.
This shift is evident in the data, which shows that whilst traditional bank transfers remain dominant for remittances (money sent between countries by individuals), digital payment services like PayPal are gaining market share in e-commerce transactions.
The research indicates that 30% of consumers make weekly cross-border e-commerce purchases, whilst 45% send or receive remittances monthly.
The global business-to-consumer e-commerce market is projected to reach US$8.3tn by 2026.
Regional Variations
The research highlights significant regional variations in cross-border payment adoption. In Singapore, where 86% of respondents report making international transactions, digital payment services have achieved widespread adoption.
This contrasts with markets such as Canada, where credit card usage dominates cross-border payments, with less than 10% of consumers using alternative payment methods.
The Brazilian market presents a distinct case study in payment evolution.
The country's historically high credit card interest rates have led to lower credit card adoption for international payments, with less than 50% of Brazilian travellers using cards abroad.
The adoption of Pix, the instant payment platform created by the Central Bank of Brazil, has influenced this behaviour.
In Germany, 49% of consumers prefer digital payment services for cross-border transactions, compared to 32% who use credit cards.
This aligns with established consumer preferences in Western Europe for secure, electronic payment methods.
Security and Trust
Security emerges as the primary concern for consumers, ranking above transaction speed and fees.
The study found that 75% of Generation Z consumers have halted cross-border payments due to security concerns, compared to 52% of Baby Boomers.
In markets with high volumes of remittance payments, such as the United Arab Emirates and the Philippines, security concerns are particularly acute.
The data shows that 87% of UAE residents and 74% of Filipino residents regularly send or receive cross-border payments.
Financial institutions face pressure to adapt their cross-border payment offerings. The research indicates that 88% of consumers expect enhanced security measures, including payment tracking and payee confirmation, as standard features. This expectation rises to 94% in the United Kingdom.
Demographic Trends
The data reveals patterns across age groups that challenge conventional assumptions about digital payment adoption.
While 84% of Generation Z consumers made cross-border transactions in the previous month, Generation X consumers show significant engagement at 77%. This suggests the digital payment transformation extends beyond younger demographics.
The remittance market, forecast to exceed US$1tn by 2028, shows different patterns.
Bank transfers remain the primary method for sending money internationally, despite often having higher fees and longer processing times than digital alternatives.
The study reveals that approximately half of consumers prefer to maintain multiple financial accounts for international transactions.
This trend is pronounced in Nordic markets, with Swedish consumers showing a particular preference for account diversification.
Such behaviour creates challenges for financial institutions attempting to position themselves as primary providers of cross-border payment services.
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