Dive into the current challenges and rapidly changing regulatory landscape and how fintechs can accelerate accessibility in digital payments, drive financial inclusion, and shape the future of payments.
Among the things you'll learn:
- Digital remittances for financial empowerment: Demonstrating how digital remittances empower underserved populations, improving access to essential financial services and creating new economic opportunities.
- Power of partnerships: How collaborations with BS2 (Brazil's pioneering digital bank for businesses), Mastercard, Visa, and other industry leaders enable secure, scalable cross-border payments that meet both compliance and customer needs, driving the future of global financial inclusion and customer experience.
- Navigating challenges in cross-border fintech: Insight into overcoming regulatory, technological, and operational hurdles to expand real-time payment capabilities worldwide, and the strategic role fintechs play in a rapidly evolving payments landscape.
Transcription:
Holly Sraeel (00:09):
Hi, I'm Holly Sraeel. For those of you who have yet to meet me, I'm Senior Vice President of Strategy and Content for American Bankers Live Media. We have a terrific panel right now. We're going to talk about what's driving the transformation of digital cross-border payments. So let me introduce our guests on the far left. Jairo Riveros, Managing Director of America's and Group Head of Strategy for Paysend to his right Anna Greenwald Chief Growth Officer of MoneyGram. To her right PayPal's, Jose Fernandez da Ponte, Senior Vice President of Digital Currencies. And to my immediate left Standard Chartered Banks Anand Natarajan, TMT and e-Commerce Cash Sales Head. Yep. Did I get it right? Okay. As part of our discussion, we're going to do a deep dive on various aspects of growth of the cross-border payments business, the big opportunities and the frictions that need to be addressed. Okay. Let's dig in. So what are the overall benefits of the digitization of payments? Anna I know you had a lot to say on this. Can I ask you to start?
Anna Greenwald (01:21):
Sure. So I think the biggest benefits for me are the big three for customers. Digitization makes it more secure for them, makes it faster for them, and there's a transparency to the process that they really wouldn't get with cash. There's an uncertainty with cash that you simply do not have with digital payments.
Holly Sraeel (01:42):
Okay. Jairo, anything to add?
Jairo Riveros (01:45):
Well, first of all, welcome. Thank you for being here. I think we're the last panel before your flights, before your drinks, before whatever. I mean really for those who are local, how many of you are local here? Thank you for hosting us. Love it. So cross border payments, I mean Anna said it very right. Digitalization addresses the pain points to me is or to us. I love patient next to Monogram, next to PayPal. I love it. I love it. Next to Charter Bank, I love it kind of This small child is about transparency, it's about security, it's about addressing also barriers and all in the benefit of what the customer at the end, which is to drive cost down.
Holly Sraeel (02:36):
Oh, I'm sorry, fall asleep at the wheel here.
Jairo Riveros (02:40):
Sorry, you thought I was going to go keep going for maybe
Anand Natarajan (02:44):
I think to add on to those two comments, right. I think one thing, especially from a banking standpoint, what we see the most digitization of cross-border payments basically helps everybody get more transparency in terms of what's happening to the payment.
(02:56):
And one example I often give is a few years back, sending across border payment was akin to checking in your luggage at the airport. You just check in and you just hope it comes out on the other side and you have no idea what happens in between. I love it and I think with the digitization of payments, it's becoming much easier for the sender, for the beneficiary, for all the participating agencies in between to actually get a real time sense for what's happening to the payment, where does the payment sit today and if a payment is being held up by it's being held up. So I think in terms of reducing the friction that exists with cross-border payments, I think that will be a big component to how we see the trend evolvement going forward.
Jose Fernandez da Ponte (03:32):
And if I may add one, I would add to the list availability for one big pain point in cross border payments as all of you know is that they work nine to five Monday to Friday. And especially that means nine to five us. So if you want to be able to settle payments over the weekend, if you need to inject money into a subsidiary over the weekend, if you need to be able to move the money around being able to do it outside of banking hours, do it over the weekends, do it. Truly 24 7 is a big advantage.
Holly Sraeel (04:00):
So let me ask more specifically about some of the most important things for cross-border payments platform to succeed today. Can we get into some specifics?
Jairo Riveros (04:12):
So let me start by saying that we have done a number of things together and I think, I mean Jose, you point on something that is very critical. We have improving our UX, the user experience we have all done. And what we have here is a combination of different regions, different aspects, but we all work in the same way. Very collaborative. We have improving user experience, making it simple, making it easier, but we still have the issue of the settlement. Can you settle, I mean could you believe, I mean you guys know we still settle. I think it's mountain time at 2:00 AM something like that. I mean it's unbelievable. It's 2025, so that continues to be one of the pain points. Is there a way that we can actually do instant settlement globally? And that will address two points that I see. One is having to pre-fund so many transactions, which is a big thing for all of us. And the second that is very important as well is the ability to then translate that into more direct benefit. Especially when you talk about other areas of the world like Asia, can you pay for a container at the time that you wish and immediately gets shipped to you? Small businesses don't have that capacity because they don't have a credit line. So I believe that's an element that I see on cross border that is quite important to address.
Anand Natarajan (05:41):
And I think maybe if I can add one more point to that, there is definitely an initiative amongst all the international banks today to simplify the method of information exchange when it comes across border payments. There's a very important initiative right now called the G20 roadmap for simplifying cross border payments. And what that aims to achieve is by 2027, 70% of all cross border payments should settle within one hour, right? And today the timeline is anywhere from 24 hours to three days to infinity, right? If your money gets stuck in some net world. But the idea is that 70% of all transactions should be settled within one hour. And what that means is this is putting an imposition on banks to say your systems need to be upgraded the way banks are talking amongst each other. There needs to be consistency in the kind of information that's being shared. And I think these sort of initiatives will help continue to sort of streamline the payment system as well.
Anna Greenwald (06:32):
I think the other thing that's really important to be successful is to meet the needs of the customer wherever they are. And to do that you need to have a great partner network, especially in the case of digital payments on the send side, you want to offer the customer the way to pay that suits their life and is common in their region. And that makes us, I think all of us very dependent on networks, both on the send side of that transaction and also on the receive side as you seek digital partnerships for bank accounts, for mobile wallets, for sent to card or cash. So really having a platform that customers don't really care that MoneyGram is in 200 corridors and countries they care that money gram is in theirs. And so meeting that very specific customer need both on the send side and the receive side is really critical.
Holly Sraeel (07:31):
Oh, I'm sorry, go ahead.
Jose Fernandez da Ponte (07:32):
On liquidity, obviously I think that was something that we forget, especially when we are talking about being in some of those longer tail corridors. Liquidity is extremely relevant. Some things work very much in the abstract or everything works really well in the USD to Euro corridor, but when you're sending money to Malawi, those corridors are much, much narrower. So some of those solutions that work beautifully from a conceptual of technology standpoint with meet the high reality of being on the road and having to have that last mile, if you don't have liquidity, basically you don't have anything.
Anna Greenwald (08:03):
And this gets exactly to High Rose Point as well about pre-funding and post-funding and settlement. I think when we think about what makes a really successful cross-border company, you cannot overstate the importance of a treasury function and nobody, it doesn't come up a lot because it's not as sexy as UX or the product, but it's all treasury
Holly Sraeel (08:28):
Alternative payment methods like mobile wallets and QR code payments have gained massive traction in emerging markets. Anand, you wanted to talk about how that's enabling businesses and consumers to adopt and benefit from these payment innovations, particularly in places like African Southeast.
Anand Natarajan (08:44):
Yeah, sure. I think, and this is something that being in San Charter, we have a fairly significant presence in Asia, middle East and Africa, which is where we've seen a significant shift in innovation in these types of alternative payment methods. So if you look at markets like Kenya, Nigeria, Tanzania, there's a significant percentage of the population who may be unbanked, but they all have access to a mobile phone and they all have access to data on their phone and this means that they all can have mobile wallets and the governments in these countries, regulators in these countries are enabling ecosystems that help these sort of unbanked individuals to still be able to transact using money in these markets. I would say in Asia the trend is sort of not as widespread as Africa, but there's still markets like China and Vietnam which have significantly sort of ramped up the usage of mobile wallets and we continue to see this trend only progressing more.
(09:35):
The interesting shift that we're seeing as a result of this is maybe going back to a few years ago, when you're a merchant in any of these markets and you're selling on a big e-commerce platform, you are limited in terms of the kind of payments you would be able to get from these platforms because they would say, I'm going to pay you in dollars or I'm going to pay you in local currency. It'll take its time to come to you and that's the solution that you're going to get. But with the prevalence of these alternative payment methods and especially mobile wallets, the shift has changed and leaning more towards the merchants who are now able to demand that I actually want to be able to get paid in these markets. And what this means is the e-commerce players, the PSPs that sit in between they all now have to solve for having access to these payment methods themselves so that when they get the money from the e-commerce marketplace, they're able to quickly turn it around and deposit it into these mobile wallets in all these various markets. So I think this trend will continue to increase, especially as the regulatory framework around this continues to evolve. And that's something we are definitely keeping a close eye on. We formed our own partnerships with a number of mobile wallets in many of these markets so that when our clients are using our network to be able to make out the last mile disbursement to the beneficiaries, we can use our mobile wallet connectivity in these countries to be able to do so.
Jairo Riveros (10:50):
Amazing. I would like to add one thing. Think about how complex it is you're trying to move into digital solutions when you are a bank and you just touched that. We launch a product is a pilot product, it's a digital send to a mobile number and instant issuing a pacer MasterCard, sorry for the visa guys that are here, we're in Visa town, but you guys are coming as well. Now this is just a prototype in a sense of we can send to a mobile number and the person receives a digital credential that now we can use now that credential, I call it 0.1 to make it 1.0 or 2, I need your retails, I need your network and I need your banks. And then it really becomes a solution because as Anna said it and you said it quite well, and it is about what the customer choice is. It's not about what we want to drive. So yeah, some might have an account send it there, some might want to pick it up, send it there. But if I can have a credential and I can go and make a choice, we call it send transfer and use it as a local whatever that might mean. I think you mentioned QR codes. I don't know where that is in the development globally, but I think is happening.
Anand Natarajan (12:14):
Yeah, I think QR codes is definitely something we are seeing a significant pickup in Asia, at least all the southeast Asian markets today. You go to a shop in a southeast Asian market, you want to pay for something, there's a QR code that flashes up on the point of sale device, right? Not even a separate thing. So the point of sale device is now configured to the extent that the QR code that shows up is actually linked to the amount that you actually transacted. You scan the QR code, the amount automatically gets populated in your bank account app and the payment goes out. So these types of innovations continue to proliferate to an extent that PSPs who built their entire business on processing card payments are now realizing that they need to be able to support these payment methods as well so that they get the end-to-end ecosystem benefit by participating in these markets.
Anna Greenwald (12:57):
GC is a great example of that in the Philippines, they've really changed the face of payments in the Philippines. And talking with GC themselves is very interesting because as a silly American I thought, well surely their biggest competitor as the mobile wallet is a bank. And they said, no, it's cash. And the government there really recognizes how much safer, more secure, all the advantages of digital payments and their working hard to get Philippines receivers to shift their remittance to a wallet. It's really interesting.
Holly Sraeel (13:36):
The demand for instant payment schemes is enormous globally. What risks does that present to digitizing payments?
Anand Natarajan (13:48):
I can go first because we do see a lot of that upfront and center from a banking standpoint. I think the one interesting thing I'll start with mentioning about instant payments is instant payment schemes exist in media markets. If I send money to you today, you get money right away in an instant payment market, but my bank hasn't yet actually sent the money to your bank, right? And to Jose's earlier point, it is all about liquidity. These banks are managing liquidity among themselves saying when the banking hours actually open, that's when the banks will settle. But in the meantime, as long as they have enough liquidity amongst themselves, they'll continue to support these instant payment transfers. Which is why in most countries when instant payment schemes kick off, they don't kick off with a million dollar limit, right? They're starting very small, they're starting with $5,000 go up to $10,000 because the banks themselves are building trust with each other in this ecosystem.
(14:41):
And as that system becomes more robust, then you start to see the limits going up, the kind of transaction activity are going up. But your point on risk, right? I think the biggest risk that we often see with instant payments is the risk of recall in a sense. So if you were to send money via a traditional a CH payment method, you felt it was incorrect, it was fraudulent, or if it was sent incorrectly to the wrong person, you have a right to recall. But instant payments, the settlement is final. There is no legal framework for you to get your money back.
(15:13):
And because of that there needs to be a much stronger ecosystem that's built in to say, when I'm making a payment to an instant payments channel, do I know for certain that I'm paying the right person? Do I know for certain that the person I'm paying to the account number and the person's name are actually matching as per the bank's records as well? So this is a framework that the central banks in various countries are sort of looking to put in place right now. So in some of the markets where we support instant payments today, we support them in more than 20 countries around the world in these markets, we now have the ability to tap into the central bank database and to basically query the central bank database to say, this is the instruction I received from my customer, do you see a matching record on your end before we actually initiate the payment out? So having the ability for banks to build out these API capabilities so that they can call on the database, confirm the account details before sending the payment instruction, which is essentially from some form of account validation, right? I think this would be definitely an important risk to address for any e-commerce merchant marketplace, customer bank looking to participate in the system.
Anna Greenwald (16:20):
And the money transfer. All of the things that customers find so wonderful about instant are the same things that become heartbreaking if there's fraud or a mistake. So doing dual entry, it adds some friction, but we have found it to be very beneficial. And then the last group was talking about ai. This is where AI can be very helpful in an instant construct. There's no space in that transaction flow for a human to be checking. And so this is where an algorithm can be extremely helpful, but I think the main risks are fraud or some other kind of regret because of mistakes.
Jose Fernandez da Ponte (17:06):
So there are indeed risks, but I think that we need to frame it as instant payment is the opportunity in digitization of payments. Obviously we need to address the risks, but some of the experiences that you will see in some of these places, either because the banks are managing the liquidity or because you can use digital currencies and do instant effectively delivery against a payment opens up use cases that we wouldn't have in the past. I remember a few months back when I was in Singapore and I had to order a cab and the equivalent to Uber there, it's a super app called Grab and my international credit card was not working, but they were accepting a stable coin. So I was able to pull up my PayPal wallet, send the stable coin from my PayPal wallet to grab it, showed up instantly on the grab app converted into Singaporean dollars. That's something that there is still complexity and it's a bit of a clunky thing that you need to do and you need to understand the wallets, but it's on us as an industry to remove that complexity from the consumer. And the moment that we have solved the pipes to move the value, rest assured that the UX is not going to be the issue. We will get better ux. Important thing is that we can start to move that money instantly
Anna Greenwald (18:12):
And it removes the whole thing about pre-funding and post.
Jose Fernandez da Ponte (18:16):
Oh absolutely.
Anna Greenwald (18:17):
And that is so costly. So as soon as we can stop having that conversation, you can pass those savings onto the customer. I mean I completely agree. Yeah, there's these risks, but we have to figure out how to manage those because it is the way.
Jose Fernandez da Ponte (18:30):
No, and the opportunity if just to add to that is to Anna's point, if you can't do instant payments, I have the privilege of also running the remittance business at a paper which is similar to money than this. You remove five days of load that you don't need to have the money park in a destination there. Exactly. You get better effects because you're not tied to having to send money five days before and you reduce counterparty risk because your money's not sitting with that counterparty in one of these markets over a weekend when it doesn't need to be all of that. You can pass through two cancers, not all of that. You can decide how much you want to pass to consumers, but today when users of Zuma remittance product, when they funded the remittance in stablecoin, we waive transaction fees, we will still monetize the spread, but we don't charge any transaction fees. So that's a real advantage for consumers.
Jairo Riveros (19:18):
Absolutely. Let me share something that I did with my team. I believe many of us have seen it. If not, I highly recommend it. It's an old movie called Catch Me If You Can.
(19:32):
I put my team, I watched it and I said, okay, so back in the days you sent a check and it took days to clear and that's why he was successful. What can we do to prevent the risk of instant payments when we think about that? And a number of ideas came thinking about all that. But that's a movie that I still watch it from time to time because I think about what we have created. It's amazing and what we have to prevent to make it a opportunity is even greater. So anyway, if you haven't seen it, please take a look at it.
Anna Greenwald (20:05):
And I think Anan mentioned too, you were talking about how important transparency is and how important it's for customers to know at all times where their funds are in the flow. And that is also the promise of instant. There's no question where your funds are in the flow.
Holly Sraeel (20:21):
Absolutely. Before we push deeper into the opportunities, which I really want to get to, can we quickly go over some of the biggest pain points in cross-border payments that need to be addressed?
Jairo Riveros (20:31):
I think we talk about cost, obviously I think we all need to bring down, I love the Eastern payment. You mentioned that it's by 2027 that it has to be in within an hour. It is also the G 20 commitment that it should not be more than 3% the cost of cross border payments for anyone. We want to make it 1% and I think we can. So that's one. Second is time. Obviously we know and time is, it can be measured in many different ways. It's not just the weekend that it takes, so the holiday, but it's also how much time it takes for one to transport himself to be able to deposit or take it back and the barriers I would say. But within all that concept, I think the ability we can really solve for the Eastern settlement around we can really kill the concept of the mountain time once a day Monday to Friday. And I'm sorry, anybody works at Swift here. I hope not please, because they don't like my story when I talk to them about that. I think we need to go, we need to pass that. And I know they will also be part of this, but I don't know if you have another one. I mean,
Anand Natarajan (21:49):
I think the one area where I think from an instant payment standpoint, we definitely need to continue investing, as I said, right? The compliance aspect of it is going to continue to be important. And it is a challenge today because in many of the markets where instant payment schemes are live, they're only live for second party transactions. You are not yet able to do third party on behalf of Lowe's in many of the markets where instant payment schemes exist. Because when you're sending an on behalf of payment, you need to include the details of the ultimate beneficiary and the ultimate originator of the transaction. But the instant payment schemes themselves do not have fields today that allow you to include these fields when you send out the payment instruction. So this actually limits the kind of use cases, but regulators are aware of it. I think banks are continuing to advocate for the improvement in the kind of information exchange that's being passed on. But that will continue to be a challenge, at least I would say for the next 12 to 18 months as regulators around the world continue to work on their instant payment channels and bake in these fields that allow for the information to be passed.
Holly Sraeel (22:55):
So can we talk a little bit about what's required to expand an open instant cross-border payments network? How important is it to develop collaborative partnerships to advance the goal critical?
Jairo Riveros (23:07):
Critical.
Holly Sraeel (23:07):
It's critical.
Jairo Riveros (23:08):
I mean no one can do it alone, isn't it? It's clear. There's no way we could claim ourselves,
Holly Sraeel (23:14):
Maybe PayPal things do alone.
Jose Fernandez da Ponte (23:17):
No, I don't think that we can do it alone. We're not doing alone today When we move to instant settlement of remittance flows, we need disbursement partners in country. Somebody, one of the beauties of PayPal is that's a two-sided network and we have our consumers in our merchants, but eventually many of them will want to have that money go to their bank account or will want to go somewhere else. And you don't operate in 200 markets if you don't have really good popularity and boots on the ground and capillary into the local financial institutions. It's a network business. Finance is a network business.
Anand Natarajan (23:50):
I think the regulatory trust is important between the different countries you're talking about, right? So today the regulators in Singapore and India have connected their cross border payment systems. So pay now instant payment scheme in Singapore, the UPI instant payment scheme in India. The two of them can actually talk to each other. You can be an Indian citizen going to a Singaporean merchant tapping your phone at that merchant's point of sale and debit your Indian account using UPI and the Singapore merchant gets paid using pay. Now this is possible because the regulators have established the data information exchange amongst themselves. There is enough testing and piloting done and for these regulators to be comfortable with each other. Similarly, Singapore and Hong Kong have connected their cross border payment schemes. Thailand and India have connected their cross border payment schemes. So I think from a banking standpoint, we see this most prevalent in the Southeast Asian markets today, but we hope that more markets continue to collaborate and sign up going forward.
Holly Sraeel (24:50):
So in our prior panel on stablecoin usage and it's expected growing utility, the panelists pretty much agreed that stablecoin use cases would be prevalent and standard by 2027 to 2028. So let me ask this and I'm going to lean into Jose first on this. How do you see stable coins approving the efficiency and cost effectiveness of cross-border payments?
Jose Fernandez da Ponte (25:20):
The promise of stable coins is around speed, around cost, and about programmability, right? So those are the three vectors. We talk a lot about speed when we talk about cost. I've been looking at stable coins for basically as long as they've been around and crypto before that. And the reason that we got excited about it is because when you look at transaction costs in some of the most efficient chains today, when we started to experiment with them, we were running transactions at 100th of a penny per transaction, not that valor per transaction regardless of the amount. And we were looking at that, we were saying I'm sure that when we do this in production, it's not going to be 100th of a penny. And obviously there are going to be costs on top of that and risk losses and other things. But if it is so much cheaper than doing traditional channels, there's going to be enough there. And when you see today that in production, when you see on some of the fishing blockchains like Solan or Stellar or others, folks are running transactions at 1 cent per transaction. But when you look at that is 26 times cheaper than an ACH transfer and it's 400 times cheaper than processing a paper check.
(26:30):
I do believe that gravity applies and that if there is a low energy state in which you will go and you can do transactions 26 times cheaper than an A CH, the market will move toward that. And the programmability is part of the holy grail of this, of being able to remove some of the humans in the loop and still keep an eye on risk and fraud and compliance. But for me, the primitive is 26 times cheaper than an ACH. That's something that's difficult to decline.
Holly Sraeel (27:00):
Jairo, Anna?
Jairo Riveros (27:02):
Well, I mean think about economists that are very dynamic on the fluctuation of their currency. That's a situation in which we experienced because the exchange rate and the end value, it is a decision point that fluctuates very quick between who they use us between let's say the three of us. We have to find ways for that to deal. And I believe the solution is there. How do we bring it to market in a way that is seamless to the customer? I cannot tell Maria in Mexico, oh, I'm going to use a stable coin and you'll have to do this on a crypto. No idea. So it's our problem. No, our problem. We have to find a solution to make all this work quite well and we will.
Anand Natarajan (27:56):
And then we do see some central banks coming up with their own central bank digital currencies as well, and they're trying to promote interoperability amongst those CBDCs too. I think that's an evolving space we continue to watch. But I know Jose, I'm curious to get your thoughts. What's your take on stable coins which are private versus the CBDCs and how do you see them playing off against each other?
Jose Fernandez da Ponte (28:18):
There is a narrative in the media about playing CBCCs against stable coins. In the end, you need to think of all this as tokenized different versions of money. Stable coins are just tokenized electronic money. The way we think about the PayPal is our stable coin. Previous D, we think of it as tokenized PayPal balance. So the PayPal banks has been around for 20 years. What we are doing now is tokenizing it and making it available outside of the PayPal network. There will be tokenized commercial bank money and those are going to be the discussion on the banking industry around tokenized deposits that is tokenized commercial bank money. And then token CBDCs are no more than tokenized central bank money
(28:55):
And those three types of money exist in the economy today. We just have a technology now that is going to enable representations of that to interact quickly. I don't think there is a competition between the three of them. I think there are going to be combinations of those CBDCS at scale are probably still a waste in the Euro initiative is probably the one that is progressing the fastest and still is going to take years. But you could imagine I have not seen any large scale deployment of a CBDCS in the works that is thinking about deploying on a permissionless blockchain. So very well could be that you're going to find stable coins that are feed back and deployed on blockchains where the reserve is CBDCs instead of being US. So those things are going to combine and composability is an important part of computing and I think that you're going to see these three, same thing that for instance, I can't see today tokenized deposits being a payment instrument between consumers. I think that probably they're going to be a fantastic way to do interbank settlement, but I don't see them as a payment instrument in retail.
Holly Sraeel (29:55):
Okay. Can I get you to respond to this then? Andreessen Horowitz's, Sam Broner said that stable coins will eat payments.
Jairo Riveros (30:06):
No, I think payments are the vehicle.
Holly Sraeel (30:10):
I'm just telling you what the man said. Agree or disagree. He disagrees.
Jairo Riveros (30:17):
I disagree. I don't have a filter. Sorry guys. Sometimes I just say it. There is a question. Oh yeah,
Holly Sraeel (30:27):
Yeah, no, please go.
Audience Member 1 (30:30):
Gosh, if you were wondering whether it was worth it or not to take the red eye to stay for this panel, thank you so much.
Jairo Riveros (30:40):
Thank you. And wait, what's coming is even better. I'm just looking at it. Modernizing payments in the US. Bridget, please do something about that.
Holly Sraeel (30:51):
Is there a question?
Audience Member 1 (30:52):
Yes indeed. Jose, 22 times cheaper.
Jose Fernandez da Ponte (30:57):
26
Audience Member 1 (30:58):
ACH, right? For the audience, this is a company that measures their ACH costs in Milli, they have the cheapest rate of anybody. You are the highest volume originator on of RTP for the clearinghouse. No one knows this better for you. Jairo, to your point, you need everybody on this panel to make it work. And Anna has the physical presence and certainly PayPal has both sides of the market with 434 million active users of their digital wallet. 36 million merchants and alignments of banks, going up 9,167 left in this country that want to play in the stable coin market, but not a single bank is offering it today through their digital wallet. There was an attempt by NIG in 2017 and later in 2022 to remarket it. They sold every major core processor including Fiserv and FIS. And we've heard nothing. So our latest announcement reported by the American banker last week is MasterCard. One, flexible credential visa's, flexible credential. How do banks play? Do you see flexible credentials carrying stable coins using the Visa network saying they'll carry more than just Visa branded debit and credit. Is there an opportunity to put high rose? Everybody get together way for banks and fintechs to play in stable coins.
Holly Sraeel (32:42):
I just lost control of this panel and Heather, bring a chair up for my friend, Richard. Anyway, please answer
Jairo Riveros (32:52):
A hundred percent I think. And that's why both Michael and Ryan are using credentials, not anymore a car because they are not. They're just a credential that can be accommodate in many, many, many ways that it is. So let's think about that and now let's apply it to ourselves. So we are digital native, meaning we were born digital, stay digital and we remain digital. But I cannot leave digital. I need the best of the experience of how many years?
Anna Greenwald (33:23):
85.
Jairo Riveros (33:24):
85 years. I mean imagine this. All this retail space is beautiful. They need to use better. And then PayPal. PayPal was somebody said the first FinTech in a way it could be. I was at MasterCard when they came to sell it to us.
Jose Fernandez da Ponte (33:41):
Probably I was not at PayPal.
Jairo Riveros (33:43):
Nobody believe it. They only play in a sandbox. Imagine what you do now and then you get charter. I mean all this is amazing. So yes, I believe that what we need is pull the pieces of the puzzle together and not wait for others to do it. We can do it. So if I can make a prediction, hopefully out of this panel, the discussion,
Holly Sraeel (34:01):
Please make your predictions.
Jairo Riveros (34:03):
Out of this panel. We'll come back with maybe something that we can share again next year. I would say so. But
Audience Member 1 (34:11):
How I hear you, but the only one that signed up to Visa flexible credential right now is Jose, right? You were in their press release, but we've heard nothing about how it works. Granted, nobody's seen it. Anna, are you guys going to use flexible credentials from the networks? Are you going to carry stuff over it?
Jose Fernandez da Ponte (34:30):
Liz, maybe. Maybe get the questions one at a time. One of the questions was about the role of banks in stable comms.
(34:37):
Absolutely. The banks have a role to play there and they should play a role. And maybe the perception that they're not doing much is given by the perspective from looking at these from the us. If you look at a standard charter, if you look at a lot of the banks out of Singapore, you look at DBS. If you look at European banks, BBA is working with Visa to use their stable coin issuance platform. I think the banks are moving there. Probably the first place where that should happen is as custodians, we need large financial institutions to be custodians of digital assets. And it seems like the world is already moving in that direction even in the US now.
Holly Sraeel (35:12):
Okay, we've got to, we'll take a question or two, but let me just ask the audience. I mean, sorry, the panel to one quick prediction each for what you expect in the next three to five years with.
Jairo Riveros (35:24):
A good partnership between us. If I don't ask you don't get it.
Holly Sraeel (35:31):
Alright. One prediction for cross-border payments next three to five years.
Anna Greenwald (35:36):
I think we will stay stablecoin adopted as a settlement mechanism.
Jose Fernandez da Ponte (35:41):
Yes.
Holly Sraeel (35:41):
Okay.
Jose Fernandez da Ponte (35:42):
I agree. I agree with that. Stable coins today are still, most of the volumes still happening on crypto capital markets. I think that the first adoption for mainstream commerce happens on cross border repayments, specifically on B2B and a settlement on B2C flows.
Anand Natarajan (35:56):
And to build on that, and maybe to answer your question, as long as regulatory friction in the world continues to exist and it will, I do not. Maybe that is a definition that regulatory friction will continue five years from now. And as long as that exists, I don't think stable coins will each payments, but they will both be on the same plate and beaten by somebody else.
Holly Sraeel (36:14):
Okay. Alright. Well we are running over, so we're going to have to take questions in the back of the room, but please join me in thanking this wonderful.