Cross-Border Payments: Innovation & Trust in New Era

For decades, the framework underpinning international payments remained largely consistent, characterized by linear models designed for batch processing, reliance on correspondent banking networks, and settlement cycles confined to traditional office hours. This established architecture served its purpose effectively in an era dominated by physical documentation, fixed-hour clearing, and unilateral data ownership. However, the contemporary global economy operates on an entirely different rhythm. Modern commerce thrives on digital platforms, expansive e-marketplaces, and continuous, 24/7 ecosystems. While data transmission is instantaneous, the transfer of value has often lagged, moving in uneven and fragmented intervals.

The imperative for a new payment architecture is no longer a matter of choice but a structural necessity. Projections from the World Bank indicate that the global real-time payments market is poised for significant expansion, anticipating a compound annual growth rate of 35.5% between 2023 and 2030. Asia is unequivocally at the epicentre of this profound shift. Cross-border outbound payments originating from the region are forecasted to nearly double, escalating from USD 12.8 trillion in 2024 to an estimated USD 23.8 trillion by 2032. Concurrently, APAC's contribution to global payment outflows is expected to grow from 32% to almost 37% within the same timeframe. As global supply chains become increasingly diversified and digital commerce scales to unprecedented levels, the demand for a more agile and responsive payment infrastructure intensifies.

From Traditional Rails to Dynamic Networks

Over the past ten years, Asia has distinguished itself as a global leader in establishing advanced real-time domestic payment systems. The widespread adoption of mobile technology, the standardization of QR codes, and the proliferation of digital wallets have collectively recalibrated consumer and business expectations regarding payment immediacy. The strategic focus is now transitioning towards achieving seamless interoperability across international borders.

Bilateral linkages represent a crucial step in this direction, exemplified by successful integrations such as Singapore’s PayNow with Thailand’s PromptPay, India’s UPI, and Malaysia’s DuitNow. These innovative connections empower small businesses and individual users to effortlessly receive international payments using only a mobile number. DBS Bank, for instance, has observed a remarkable nearly three-fold year-on-year increase in cross-border DBS PayLah! QR transactions, underscoring the substantial latent demand that is unleashed when the payment experience becomes truly instant.

Concurrently, significant progress is being made on the development of multilateral infrastructure. Project Nexus, spearheaded by the Bank for International Settlements (BIS), aims to unify the instant payment systems of India, Malaysia, the Philippines, Singapore, and Thailand under a cohesive single access framework. This initiative signals a clear move towards shared international standards, transcending mere bilateral agreements. The participation of the European Central Bank and Bank Indonesia as observers further highlights the global relevance and potential of this emergent model.

Financial institutions retain their pivotal role throughout this transformative period, albeit with an evolving mandate. Their function is shifting from primarily operating individual payment rails to facilitating network-level access to essential components such as liquidity, regulatory compliance, and efficient settlement mechanisms. DBS, as an illustration, provides near-instant to same-day global payments by leveraging a sophisticated combination of proprietary and external payment networks. This includes enabling cross-border transfers directly to digital wallets, thereby effectively supporting the escalating volumes of e-commerce transactions. In this dynamically evolving landscape, the genuine competitive advantage is no longer derived from ownership of the underlying payment rail, but rather from the masterful orchestration of value movement across a multitude of interconnected rails.

The Elevating Importance of Trust in Digital Transfers

While instant settlement dramatically accelerates the movement of funds, it concurrently introduces amplified risks. In response to this challenge, the financial industry is undergoing a fundamental shift: compliance, traditionally viewed as a post-event control mechanism, is now being meticulously integrated directly into the core architecture of payment systems. The deployment of advanced AI-based screening technologies, inline anomaly detection capabilities, and the creation of immutable audit records are fundamentally transforming the verification process. What was once a mere checkpoint is now becoming an inherent, foundational design feature. The overarching objective is no longer to deliberately slow down a payment to ascertain its safety, but rather to engineer a payment system that inherently ensures safety while operating at maximum velocity.

This paradigmatic shift has prompted a deeper philosophical re-evaluation of the very essence of a payment. Payments are no longer perceived merely as the terminal action of a commercial process. Instead, they are increasingly recognized as the critical synchronizing layer that seamlessly interconnects liquidity, working capital management, comprehensive data insights, and robust supply-chain assurance. A cross-border transfer that may be inexpensive to dispatch but proves costly and laborious to reconcile merely displaces rather than eliminates expenses. Consequently, true optimization transcends mere transactional speed; it resides in the harmonious alignment of financial flows with the corresponding movement of data, the effective management of risk, and efficient decision-making processes.

Harnessing Tokenisation and Blockchain for Future Payments

Concurrently with efforts to enhance existing payment infrastructures, nascent technologies such as tokenisation and blockchain have emerged as powerful disruptors, promising to deliver the speed, cost-efficiency, transparency, and accessibility demanded by modern global commerce.

While these technologies themselves are not entirely new concepts, the present moment represents a pivotal point of convergence. Building upon invaluable experience gained from years of pilot programs and regulatory sandboxes, both traditional financial institutions and large corporations are now actively investigating and implementing distributed ledger technology (DLT) and innovative instruments such as tokenised deposits and stablecoins for streamlining international payment processes.

The Advantages of Tokenised Money

• 24/7 Availability & Instant Settlement: Tokenised forms of money can be transferred around the clock, facilitating near-instant, atomic settlement.
• Enhanced Transparency: Utilizing a common, immutable ledger for value transfer significantly boosts transparency and dramatically reduces the need for manual reconciliation.
• Reduced Costs & Improved Liquidity: Transaction costs and settlement times are substantially lowered, unlocking previously trapped liquidity within the system.
• Programmability: Tokenised money is inherently programmable, allowing smart contracts to be embedded. This enables the automation of complex processes and rule-based fund movements, leading to greater control and operational efficiency.

Demonstrating leadership in this domain, DBS launched a comprehensive suite of blockchain-enabled services last year. These services offer institutional clients instant, 24/7 real-time payments leveraging the bank’s permissioned blockchain. By seamlessly integrating these cutting-edge capabilities with the bank’s core payment engine and existing market payment infrastructures, these services achieve scalability and grant institutions access to millions of customers and merchants. Institutional clients can further utilize smart contracts to automate fund movements based on predefined conditions, thereby ensuring enhanced compliance, security, and transparency.

Challenges and the Path Forward

Despite the compelling vision of employing tokenised money and public permissioned blockchains for international payments, significant challenges persist. Regulatory frameworks across major global jurisdictions have yet to achieve harmonization, creating a complex and often fragmented operational environment. While advancements have been made to expand transaction capacities on prominent public blockchains, the broader ecosystem remains fragmented and continues to grapple with issues of true interoperability. The technical complexity of enabling instantaneous atomic swaps of tokenised money across disparate currencies for foreign exchange markets remains a considerable hurdle. Ultimately, for tokenised money to transition beyond native crypto ecosystems and fully integrate into mainstream payments, it requires the establishment of universal trust.

The formation and evolution of the current global correspondent banking network was an organic, multi-decade process, developing in parallel with the growth of international trade, the establishment of bilateral relationships, the cultivation of trust, and the gradual standardization of practices. Significant change inherently requires time. Scaling these transformative new technologies necessitates navigating the same fundamental challenges related to standardization, regulatory clarity, the building of trust, and the critical achievement of the network effects that so profoundly shaped the traditional correspondent banking world.

Encouragingly, such collaborative initiatives are already underway. In September 2025, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) – the preeminent global provider of secure financial messaging services – announced its intention to develop a blockchain-based digital ledger. This ambitious project is a collaborative effort involving a consortium of over 30 leading banks, including DBS. The proposed ledger, designed to be fully accessible by SWIFT's extensive global banking network, aims to transform instant, always-on cross-border transactions into a tangible reality, all while maintaining seamless interoperability with established traditional correspondent banking rails.

Converging Towards a New Operating Rhythm

The future landscape of international payments will be defined by institutions capable of seamlessly integrating the inherent integrity and resilience of existing systems with the advanced intelligence and agility of emerging technologies. In such a sophisticated model, the creation of value will no longer be primarily measured by fee compression but rather by a significant expansion of capabilities. This includes liquidity that flows continuously instead of requiring pre-funding, and compliance mechanisms that are intelligently automated rather than being layered on as separate, manual processes.

The industry's trajectory is not towards disruptive fragmentation, but rather towards the deliberate creation of a redesigned operating model. In this innovative paradigm, the transfer of monetary value becomes inextricably linked with the simultaneous transfer of certainty and critical information. This precise point—where transformation, trust, and value transfer powerfully converge—is where international payments evolve beyond mere speed. They become foundational pillars, indispensable to propelling the next significant phase of global economic growth.