Against the backdrop of the rapidly growing value of global cross-border payments, the Digital Banker spoke with Nadeesha Senaratne, Head of Retail Products and Journeys, HSBC Singapore to learn more about how API integration is driving transformation in the cross-border payment landscape, improving transaction predictability and efficiency for consumers – through the lens of HSBC’s major partnership with Dandelion.
Prachi Rajgarhia: What are some of the key trends in cross-border transactions that can help alleviate existing pain points?
Nadeesha Senaratne: Cross-border transactions have historically faced several significant challenges, including high costs, extended processing times, lack of transparency, and limited financial inclusion. However, we are seeing several promising trends that are addressing these pain points head-on:
- Adoption of real-time payments and last-mile connectivity: The increasing adoption of real-time payment systems, such as US Faster Payment, and by connecting domestic payment infrastructures looks set to enhance payment efficiency and create more inclusive financial ecosystems.
- Technological advancements: Emerging technologies like Distributed Ledger Technology (DLT) are being piloted in solutions such as Central Bank Digital Currencies (CBDCs). Open Banking and APIs are also playing a significant role in improving efficiency and integration.
- Digital wallets becoming mainstream: The growing adoption of digital wallets and their interoperability with virtual payment addresses is driving down transaction costs and making financial services more accessible.
- Regulatory harmonisation: Collaboration among regulators through international settlement initiatives and the co-development of global frameworks at fintech festivals is promoting standardisation and cooperation among jurisdictions across borders.
- Embedded payments in eCommerce: The integration of payment solutions directly into eCommerce platforms is simplifying transactions and enhancing convenience for both businesses and consumers.
Prachi Rajgarhia: What are the immediate benefits of HSBC’s partnership with Dandelion for all stakeholders involved?
Nadeesha Senaratne: Our partnership with Dandelion to offer our Global Money Transfer service has delivered one of our most significant achievements to date: enabling our customers to transact “like a local” in over 100 destinations and in more than 60 currencies via HSBC Singapore’s mobile banking app.
The enhanced service addresses long-standing challenges in traditional cross-border payment rails, where multiple intermediaries have historically led to higher costs and longer processing times. Moreover, today’s customers expect predictability in their transactions and want assurance that their money will arrive in full, on time. This implementation represents a major leap forward in our ability to serve our customers internationally and more effectively.
Prachi Rajgarhia: How can single API integration transform the way banks and customers interact with each other?
Nadeesha Senaratne: Consider the complexity and the costs required to implement and maintain, for example, 40 separate APIs – one for each country. Banks would have to contend with escalating, duplicate costs and daunting operational complexity. A single API integration is therefore a game-changer for banks and their customers, offering significant advantages in efficiency and user experience.
By leveraging a single API with a global partner like Dandelion, banks such as HSBC can streamline processes, reduce costs, and improve agility. This approach enables financial institutions to stay competitive with fintech companies in a rapidly evolving ecosystem. Customers benefit from faster, more transparent, and more convenient transactions, enhancing their overall experience.
Prachi Rajgarhia: Talk to us about the importance of collaborations/partnerships with global and regional financial services providers? How can these efforts transform the industry at large?
Nadeesha Senaratne: In today’s rapidly evolving financial landscape, partnerships with financial service providers have become more crucial than ever before. While traditional partnerships with correspondent banks and the established SWIFT network have long been fundamental to cross-border payments, the increasing demands of global trade, influence of social media, and evolving customer expectations – combined with increasing pressure on costs and margins – have made strategic collaborations between financial services providers even more vital.
These partnerships can transform the industry in several meaningful ways. First, they enable faster expansion and significantly reduce time-to-market for new joint services. They also provide cost-effective access to regional markets that might otherwise be challenging to penetrate. Through collaboration, we can build a more seamless payment infrastructure and achieve greater interoperability between disparate systems and regions. Most importantly, these partnerships help strengthen trust and ensure compliance with regulatory requirements across different jurisdictions.
Prachi Rajgarhia: Discuss top three predictions that will transform the cross-border payments landscape in the next five years?
Nadeesha Senaratne: Looking ahead, the future of cross-border payments is being shaped by these transformative trends:
- Mainstream adoption of DLT and CBDCs: As DLT and CBDCs gain traction, they are expected to revolutionise the speed and security of cross-border transactions, especially high value ones.
- Open banking and APIs meet regulatory collaboration: These innovations are driving the adoption of embedded payments, enabling seamless connectivity and greater customer convenience. Coupled by the increased collaboration among regulators, the global cross-border landscape looks set to be more standardised and cooperative in nature.
- Artificial Intelligence (AI) and Machine Learning (ML) advancements: Technologies like AI and ML are improving fraud detection, personalising customer experiences, and driving financial inclusion.
At HSBC, we remain committed to being at the forefront of these innovations while maintaining our unwavering focus on customer service excellence. Our recent strategic partnership with Dandelion is a key reflection of our dedication to providing our customers with seamless, secure, and cost-effective cross-border payment solutions. As we continue to navigate this evolving landscape, our primary goal remains unchanged: to open a world of opportunity for our customers by making international payments as simple and efficient as domestic ones.
