1. Technology innovation will transform international payments.

In today’s connected world, consumers are no longer willing to put up with delays and hefty fees for processing cross-border payments. As customer demand for frictionless on-demand payments grows, payment providers and banks will be competing to offer ever faster cross-border payment services to their customers. This will drive the wider adoption of blockchain and distributed ledger technologies, enabling financial institutions to transfer low-value payments in real-time at a fraction of the cost incumbent processes are taking. This technology can enable financial institutions to move money around the world in the same way that we exchange information over the internet, so 2020 will be a tipping point for driving efficiency and innovation in cross-border payments.

  1. The rise of banking-as-a-service will drive stronger competition in the market.

With banks having to juggle the relentless pressure of faster innovation while keeping down technology costs, we’ll see more financial institutions turning to cloud providers to help radically reduce IT costs.

Cloud-based solutions are ideally placed to easily and cost-effectively plug into emerging blockchain networks, AI engines and other developing FinTech innovations. As such, using cloud-based technologies will create a strong competitive advantage for agile, forward-looking financial services providers that embrace digital innovation - intensifying market competition around the globe. Cloud-platform companies like 10X and Thought Machine are great examples of this new paradigm that is being adopted by banks, and we’re likely to see more similar players entering the market in 2020 and beyond. As a result, on-premise “museum” banking technology will be increasingly displaced by more agile, affordable cloud-based fintech solutions.

With banks having to juggle the relentless pressure of faster innovation while keeping down technology costs, we’ll see more financial institutions turning to cloud providers to help radically reduce IT costs.

  1. This will be the year of new cross-currency consumer payment solutions:

In 2020, we’ll see a rise in new consumer purchase solutions for tourists and travellers that enable cross-currency payments, without requiring cards or card rails. For example, such solutions could enable a Japanese tourist visiting Thailand to make purchases using a mobile app or QR code, triggering an immediate cross-border payment from their Japanese yen account to a Thai baht merchant’s account. Blockchain technology, combined with digital assets, will be a key driver in this innovation. Such payment services could have a huge impact on the payments market, bringing untapped opportunities for payment providers in the new year

  1. In-app micro and wallet payments will become mainstream.

As technological innovation helps bring down the cost for processing cross-border payments, the business case for micropayments is becoming more viable. Traditionally, micropayments have been confined to messaging apps like Telegram and Line, but with big tech companies introducing payment services of their own, the case for micropayments will soon expand far beyond that. In 2020 we can expect to see a surge of developers flocking to blockchain and digital assets do develop solutions to satisfy demand for in-app, real-time micropayments. For example, micropayments can be applied across multiple use cases and industries: from incentivising players in the gaming industry to creating new payment models for the streaming of online content or paying for energy/electricity bills.

  1. The shift toward low-value, high-volume payments will help SMEs break into new markets much faster.

The cross-border payments market today is not set up for small businesses. In fact, international payments are often slow, prone to errors and accrue extremely high costs. Moreover, international payments are not even readily available in some emerging markets. This is a huge setback for small businesses looking to expand operations and scale internationally. The good news is that new blockchain technologies can address all these challenges and enable SMEs to invoice and receive international payments immediately, in small amounts, and with 100% certainty.

The adoption of blockchain technologies has the potential to be a game-changer for SMEs globally - enabling them to improve cash flow and reduce the cost of running a business while freeing up precious capital for reinvestment. As a result, 2020 will see a rise in international payment services for SMEs across emerging markets, helping them to expand and process immediate payments around the world and improve access to new markets.