Web3 Payments: The Innovative Path of Cross-Border Payments for Consumers

Consumer cross-border payment habits are changing. People are trying a variety of payment methods but are still looking for better options. As an executive from a major payment company stated: "The changes in payment methods over the past five years are greater than those in the past fifty years."

In today's world of continuous development of blockchain technology and digital currencies, the deeper reason for the change in payment methods is the transformation of accounting methods - the blockchain, a publicly transparent global ledger.

The methods of accounting for humanity have changed only three times over thousands of years, each time profoundly shaping economic forms and social structures, reflecting the co-evolution of technology and civilization:

• The single-entry bookkeeping of the Sumerian period allowed humanity to first break through the limitations of oral communication, promoting early trade and the formation of states;
• Double-entry bookkeeping drove the commercial revolution during the Renaissance, facilitating the emergence of banks and multinational corporations, and establishing commercial credit;
• The distributed ledger driven by Bitcoin in 2009 facilitated the rise of decentralized finance, changes in trust mechanisms, and the emergence of digital currencies.

This far-reaching transformation is continuously evolving and is currently facilitating Web3 payments based on blockchain and digital currencies. This new payment method is increasingly penetrating various aspects of real-world society.

This article will explore the solutions provided by Web3 payments for the main scenarios of current consumer cross-border payments and look ahead to the future development direction of Web3 payments.

I. The Growing Cross-Border Payment Market

Driven by the surge in cross-border e-commerce, cross-border travel, and cross-border remittances, the cross-border payment market is experiencing explosive growth. Consumers are making cross-border payments more frequently than ever, and it is expected that by 2027, related payments will reach $250 trillion.

Consumers around the world are embracing cross-border payments, with spending on cross-border transactions higher than ever before, but what's truly interesting is the frequency: 30% shop cross-border through e-commerce weekly, 45% send and receive remittances monthly, and 66% travel abroad annually.

Generally, people tend to form habits that make routine decisions easier and more efficient, but in the field of cross-border payments, this habit has yet to be established. On average, they will use 4 out of 7 different payment methods, and only 16% of consumers will consistently use the default payment method.

Currently, it seems that no payment method can fully meet consumers' needs for cross-border payments, although nearly 80% of consumers are still using traditional banks for cross-border payments. However, one clear point for consumers is that they need a secure and trustworthy cross-border payment provider.

From June 2023 to June 2024, a total of 771 million people engaged in cross-border transactions. Research indicates that this growth is driven by three categories of transactions: e-commerce, tourism, and remittances.

1.1 Main Scenarios and Methods

A. Cross-border e-commerce

Eighty percent of consumers choose to shop through cross-border e-commerce, with 67% of them engaging in cross-border consumption every month. By 2026, the global B2C e-commerce market size is expected to exceed $8.3 trillion. Nowadays, finding desired products globally is no longer a difficult task, but the payment experience still needs improvement. Consumers yearn for simple, easy-to-use, and secure payment methods to successfully complete each cross-border shopping experience.

B. Cross-border travel

Two out of every three people have cross-border travel experiences, and 52% of them travel more than once a year. According to the 2024 travel trends, the main purpose of travel for people is to relax and relieve stress. Therefore, the last thing travelers want to encounter is the pressure or worries of shopping. They need a simple and secure payment method so that they can fully enjoy their travels.

C. Cross-border remittance

Four out of ten people use cross-border remittance services, with 45% of them making remittance transactions every month. Despite the complex geopolitical situation, the number of international migrants continues to grow, and it is expected that by 2028, the cross-border remittance market will surpass $1 trillion. This trend has also driven the increasing demand for remittances to domestic relatives and friends. Consumers are urgently seeking a safe and reliable way to make cross-border remittances.

Among the following seven cross-border payment methods, the average consumer will use four of them:

1. Electronic payment methods;
2. Credit card or debit card;
3. P2P transfer;
4. Bank Remittance
5. Online Transfer;
6. Prepaid travel checks/cards;
7. Cash.

1.2 Why is now the right time to provide cross-border services to consumers?

The cross-border trading market is vast and continuously growing. This is a critical stage in the development of cross-border trading. More and more consumers are frequently making cross-border payments, but traditionally, these transactions tend to be slow, costly, and lack transparency. However, all of this can change completely.

Consumers are currently using a variety of payment methods. Each consumer is trying out different payment solutions, actively seeking the one that suits them best. However, they have not yet found the ideal solution. They crave more options and hope to receive guidance to help them make informed decisions. As consumers begin to form habits that may last a lifetime, now is a critical moment to influence their choices.

Consumers need stable payment habits and reliable partners. As banks and fintech companies realize the potential of becoming the preferred cross-border payment method for consumers, market competition will intensify. This is not only an opportunity to attract new customers through new services but also a chance to retain existing customers in cross-border consumption with one-stop solutions. However, there is also the risk of other competitors getting ahead.

The foundation of trust cannot be ignored. In cross-border transactions, trust, security, and reliability are crucial, especially in cases where the transaction amounts are often large. Consumers are highly sensitive to these factors and expect banks and fintech companies to provide a secure and reliable payment environment. Gaining customer trust is key to establishing long-term partnerships.

2. Main Scenarios and Models of Cross-Border Payments for Consumers

The following will delve into the scenario processes of cross-border e-commerce, cross-border travel, and cross-border remittance payment transactions, as well as the core issues encountered in cross-border payments.

2.1 Cross-border E-commerce

In the past year, approximately 589 million people participated in cross-border e-commerce transactions worldwide. Among them, 72% of the transactions involved purchasing physical goods through mainstream online retailers, while 44% of the transactions were for digital products. Despite the rising social media market, only 30% of consumers shopped through these platforms, which may be related to concerns about data breaches.

In terms of cross-border shopping payment methods, consumers mostly choose credit cards, debit cards, or digital app payment services. However, financial institutions may be surprised to find that only 51% of consumers use credit or debit cards. This means there is still market space for other payment methods, such as 36% of consumers opting for digital app payment services, while some consumers use wire transfers or P2P services.

However, there are still significant differences in consumption habits across different countries:

Germany: Consumers are least willing to use credit or debit cards (, with only 32% ) preferring digital app payment services ( at 49% ) and bank transfers or wire transfers ( at 35% ). This may be because consumers value the security and ease of use of payments more.

Philippines: The preferred digital APP payment method for consumers ( 49% ), which may be related to the fact that 48.2% of local consumers are unable to access traditional banking systems.

These data indicate that the choice of payment methods varies by region and consumer demand, and financial institutions and e-commerce platforms need to provide diversified payment solutions based on local market characteristics.

The payment scenario for cross-border e-commerce often involves consumers in their home country making purchases through the payment gateways of overseas e-commerce platforms. Payment gateways will inevitably link various payment methods, such as preferred credit or debit cards ( through card organization networks ), digital app payments, bank transfers, etc.

2.2 Cross-border Travel

Among the surveyed consumers, two-thirds had traveled abroad in the past year, with 62% indicating that they used credit or debit cards to book their trips, making it the most popular payment method. This preference is reflected not only in booking travel but also in their actual spending abroad. Most respondents used the same payment method during their travels as they did when booking their trips. This may be because credit cards are widely accepted and offer conveniences such as instant currency conversion and fraud protection.

Even though factors such as geopolitical issues are constantly emerging, cross-border travel has still become a norm, especially in Singapore (86%) and the UAE (84%), where the proportion of consumers traveling abroad is the highest. In the 13 markets surveyed, nearly 50% of respondents from each country had traveled abroad in the past year.

In terms of travel payment methods, most consumers choose credit cards or debit cards to book trips or pay for travel expenses. However, a small number of consumers also use other payment methods such as bank transfers, wire transfers, or digital app payment services.

Canadian travelers especially prefer credit or debit cards, with the proportion of using other payment methods being less than 10% compared to other markets. This may be because Canadians place more value on credit card reward systems, with consumers prioritizing reward points over transaction speed.

In contrast, Brazilian tourists are the least likely to use credit cards, with a probability of less than 50%, which may be related to the historically high credit card interest rates in Brazil, while also being influenced by the widespread adoption of PIX, an instant payment platform created by the Central Bank of Brazil.

Payment scenarios are more likely to be: consumers using their domestic debit or credit cards to make purchases at foreign merchants offline, or using digital app payment platforms to scan codes.

( 2.3 Cross-border remittance

In the past 12 months, 40% of respondents have sent or received remittances, with bank transfers or wire transfers being the most common payment methods. It is not surprising that countries with a large immigrant workforce, such as the UAE and the Philippines, have the highest remittance sending and receiving rates, at 87% and 74% respectively. Remittances are an important source of funds for millions of workers and families worldwide, and senders hope to get the most cost-effective payment services in each transaction.

In 2023, the total remittances flowing to low- and middle-income countries increased by 3.8%, reaching $669 billion. In the Asia-Pacific region, China, India, and Singapore are markets with frequent remittance activities. A notable trend is that digital app payments are increasingly favored by remitters due to their security and ease of use, gradually becoming the primary method for sending and receiving remittances. Compared to traditional remittance methods, digital app payments are considered to have higher security.

Compared to digital app payment methods, there are significant differences in cross-border remittance payment methods. Although the processing time for banks or wire transfers is longer and the costs are often higher, they remain the most commonly used remittance methods.

Unlike other markets, the proportion of users using cross-border remittances in the United States is the highest at 35%. This may be due to the convenience and ease of use of debit card payment methods. In the UAE, consumers in