Web3 Payments: A New Choice for Consumers in Cross-Border Payments

Consumer cross-border payment habits are constantly changing. People are starting to try various payment methods, but they are still looking for better options. As an executive from VISA stated: "The changes in payment methods over the past 5 years have been greater than in the past 50 years."

In today's world where blockchain technology and digital currencies are constantly evolving, the deep reason for the changes in payment methods is the transformation of accounting methods—the blockchain, a public and transparent global ledger.

The changes in human accounting methods have only occurred three times in the past few thousand years, each 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 break through the limitations of oral communication for the first time, 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, as well as the establishment of commercial credit;
• The distributed ledger driven by Bitcoin in 2009 facilitated the transformation of decentralized finance, trust mechanisms, and the rise of digital currencies.

This far-reaching transformation is continuously evolving and has currently led to Web3 payments based on blockchain and digital currencies, a new payment method that is penetrating various aspects of real society.

This article will leverage market research data and real-world cases to explore the solutions provided by Web3 payments for the current major scenarios of consumer cross-border payments, and look ahead to the future development direction of Web3 payments.

1. The Rapidly Growing Cross-Border Payment Market

The rapid growth of cross-border e-commerce, cross-border travel, and cross-border remittances has driven explosive growth in the cross-border payment market. Consumers are making cross-border payments more frequently than ever before. It is predicted that by 2027, related payments will reach $250 trillion.

Consumers around the world are embracing cross-border payments. Today, consumers are spending more on cross-border transactions than ever before, and what's more interesting is the frequency. 30% shop cross-border through e-commerce every week, 45% send and receive remittances every month, and 66% travel abroad every year.

In general, people tend to form habits that make routine decisions easier and more efficient, but this habit has not yet been established in the field of cross-border payments. On average, consumers use 4 out of 7 different payment methods, and only 16% of consumers consistently use their default payment method.

Currently, it seems that there is no payment method that 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 thing that consumers are very clear about 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 shows that this growth is mainly 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 making cross-border purchases every month. It is predicted that by 2026, the global B2C e-commerce market size will exceed $8.3 trillion. Nowadays, finding desired products globally is no longer a difficult task, but the convenient payment experience still needs improvement. Consumers crave 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 experience with cross-border travel, 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 worry when shopping. They need a simple and secure payment method so they can fully enjoy their trip.

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 size will exceed $1 trillion. This trend has also driven the increasing demand for remittances to domestic relatives and friends. Consumers urgently need 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 Transfer
5. Online Transfer;
6. Prepaid travel checks/cards;
7. Cash.

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

The cross-border trading market is large 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 searching for the one that suits them best. However, they have yet to find the ideal solution. They crave more options and hope for guidance to help them make informed decisions. As consumers begin to form habits that may last a lifetime, now is a critical time to influence their choices.

Consumers need stable payment habits and reliable partners. As banks and fintech companies realize the potential to become 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 an opportunity to retain existing customers for cross-border consumption through 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 when the transaction amounts are often large. Consumers are very sensitive to these factors and expect banks and fintech companies to provide a safe and reliable payment environment. Winning customer trust is key to establishing long-term partnerships.

2. Main Scenarios and Models of Consumer Cross-Border Payments

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 around the world participated in cross-border e-commerce transactions. Among them, 72% of transactions were for physical goods purchased through mainstream online retailers, while 44% were for digital products. Despite the rise of social media markets, only 30% of consumers shop 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, only 51% of consumers use credit cards or debit cards. This means there is still market space for other payment methods, such as 36% of consumers choosing digital APP payment services, and some consumers using wire transfers or P2P services.

However, there are still significant differences in consumption habits among 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: Consumers' preferred digital APP payment method (49%), which may be related to the fact that 48.2% of local consumers cannot 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 diverse payment solutions based on local market characteristics.

The payment scenarios for cross-border e-commerce are more likely to involve consumers in their home country making purchases through the payment gateways of overseas e-commerce platforms. Payment gateways will inevitably connect to various payment methods, such as preferred credit or debit cards ( through card network ), digital app payments, bank transfers, etc.

2.2 Cross-border Travel

Among the consumers surveyed, two-thirds 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 the booking of 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.

Despite the continuous prominence of factors such as geopolitical issues, cross-border travel remains 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.

When it comes to travel payment methods, most consumers choose credit 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 cards 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 a higher value on credit card reward systems, with consumers prioritizing reward points over transaction speed.

In comparison, Brazilian tourists have the lowest likelihood of using credit cards, below 50%, which may be related to the historically high credit card rates in Brazil and is also influenced by the widespread adoption of PIX, an instant payment platform created by the Central Bank of Brazil.

Payment scenarios will more often be: consumers using their domestic debit or credit cards to make purchases at brick-and-mortar foreign merchants, 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. In countries with a large immigrant workforce, such as the UAE and the Philippines, the remittance send-receive ratio is the highest at 87% and 74%, respectively, which is not surprising. Remittances are an important source of funding for millions of workers and families around the world, and senders wish to obtain the most cost-effective payment services for 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 more frequent remittance activities. A significant trend is that digital app payments are increasingly favored by remitters due to their security and ease of use, gradually becoming the main 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 costs are often higher, they are still the most commonly used remittance methods.

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