In a global, digital economy, multi-currency payment processing is becoming a must-have capability for companies that do business with an international clientele. Over the next few years, the payment services industry will increasingly incorporate blockchain technology, artificial intelligence, real-time payments, contactless payments, and more into payment solutions. In the following report, we’ll explore these trends and speculate on how the market for multi-currency payments will continue to grow in the near future.

The impact of globalization.

As markets go global, ecommerce facilitated by online payments is quickly becoming one of the most prevalent and convenient ways to do business. Companies that move into emerging markets often find that their customers want to have a variety of payment methods at their disposal, including mobile payments and plans that can be integrated into a valid cross-border payment system. Many of these customers would rather pay for goods or services in their own currencies, especially when they can do so using instant payments, also known as real-time payments, which can be processed and settled in a few seconds.

Multi-currency payment processing facilitates cross-border and intranational transactions by utilizing payment gateways and payment rails to streamline currency conversion. Real-time payments enhance the speed of global commerce and can potentially increase participation in ecommerce in developing markets. Adopting instant multi-currency payment solutions can help businesses expand their customer base and improve their cash flow. Businesses can also benefit from increased security, better fraud detection, and fewer payment processing delays, allowing them to manage their finances more easily and create a better customer experience.

In the next five years, many smaller cash-based economies are expected to transition to instant payment systems, which will support nearly half of the total transaction volume in their developing markets. This shift should increase the demand for digital wallets, which are an essential component of the digital payment infrastructure. Many countries in Africa, including Ghana and Kenya, are leading the push toward promoting mobile wallets and cashless transactions as they expand their digital networks.

Technological advancements.

Because multi-currency payment systems rely on digital technology to function, technological advancements in blockchain, artificial intelligence (AI), and machine learning (ML) play a key role in driving payment trends.

Blockchain technology.

According to a PYMNTS study, at least 56% of cross-border businesses use blockchain technology. Blockchain-based payments have developed a reputation for being transparent and secure and are increasingly used to conduct cross-border transactions. Although regulatory compliance and volatility can create costs, risks, and challenges for service providers who deal in cryptocurrency, blockchain technology continues to evolve and gain mainstream traction as a means of dealing in fiat currency. Traditional banks like JPMorgan Chase are partnering with industrial manufacturers to create blockchain-based payment systems that support multiple currencies and cross-border exchange.

Artificial intelligence and machine learning.

Artificial intelligence and machine learning are technologies that enable financial service providers to analyze financial information and transactional data, identify patterns, and make predictions that can improve security, assess risk, and help detect fraud. When integrated into multi-currency payment processing systems, these technologies can automate data analysis to speed up and improve decision-making. The application of these technologies is increasingly important in the context of open banking, which supports decentralized payment initiations that can speed up settlements and reduce transaction fees. Eventually, as more businesses adopt AI-enhanced real-time payment systems, customers will have more opportunities to make multi-currency transactions.

The rise of contactless payments.

As contactless payments using mobile wallets, digital wallets, payment apps, and cards are becoming more widespread, cash transactions are declining around the globe. Tap-to-pay transactions are gaining favor because they are convenient, safe, and hygienic for consumers, and they reduce operational costs for businesses. Developing countries around the world are increasingly integrating instant-payment systems into their economies, and as digital wallets become more prevalent, multi-currency digital transactions will only become more common. Large cash-reliant economies, including Brazil and India, and smaller economies, such as Nigeria, are championing the modernity of instant-payments networks, while in other countries like Germany, instant payments are supported by fees and promoted as a premium option to customers.

Market growth predictions.

Globalization has many economic consequences, not least of which is the increasing complexity of trade as businesses’ source materials, supplies, and services from international partners. Multi-currency payment processing helps these businesses operate more efficiently by increasing the reliability and speed of their transactions.

The 2021 edition of McKinsey’s Global Payments Report predicts that by 2025, growth in the payments sector will reach $2.5 trillion. McKinsey’s updated Global Payments Report for 2023 notes that global cash usage is declining while the growth rate for digital transactions continues to increase. In 2022, Europe, North America, Latin America, Africa, and the Middle East all reported strong revenue growth in the digital payments sector. With the exception of China, the Asia-Pacific region is also experiencing revenue growth in the payments industry.

Many analysts believe that, based on past performance and current trends, growth in the payments industry will be robust over the next five years. Revenue is expected to grow at a rate of 6-8% as the global economy continues to expand. Global electronic transaction volumes are expected to increase, and payments revenue is expected to pass the $3 trillion mark by 2027. Because the payments industry is increasingly enmeshed with the technology sector, the adoption of AI could also spur growth by reducing operating costs and increasing productivity in the banking sector.

Multi-currency payments and cross-border transactions will generate new opportunities for consumer-focused businesses that deal in high volumes of relatively low-value transactions valued at under $100,000 each. These payment flows collectively account for a large share of payment revenue because they have high margins and involve large retail networks.

Emerging payment trends indicate a bright future for multi-currency transactions.

As technology evolves and international commerce increases in scope and complexity, multi-currency payment systems are poised to become the norm for many businesses. Trends in the payments sector point to a bright outlook for suppliers, businesses, and consumers who make use of emerging cross-border and multi-currency payment options.