In a sign that traditional financial institutions can also innovate and adapt to the growing demand for easier, faster, and less expensive cross-border payments experiences, HSBC has announced the launch of what they are calling HSBC Global Wallet.
The brief posting appears in altfi and indicates that HSBC customers in the U.S., U.K. and Singapore can keep accounts in seven different currencies to make local payments in those markets. The product is targeted towards customers who may have considered and/or used fintech alternatives such as Wise and will be attracted to a bank solution, as well as new users.
‘Called the HSBC Global Wallet, the new account lets businesses hold seven different currencies, including Euros, Pound Sterling and US Dollars, and then use those funds to ‘pay like a local’ in dozens of countries around the world….“Global Wallet makes it as easy for our customers to deal with a supplier or a client on the other side of the world, as it is to deal with one on the other side of town,” said HSBC’s global head of liquidity and cash management Diane Reyes….“We’re giving our clients a virtual presence in markets around the world—where they can hold and send cash just like a local business—while also eliminating the need to use third-party platforms for international payments.”…HSBC says it plans to add new currencies to Global Wallet soon and, because payments are made using a local payments network level through the bank, they’re much faster than traditional international payments.’
We have been providing member research on longer-term developments in the space and also keeping track of the various forms of innovation that are being announced on a regular basis as cross-border scrutiny increases and banks look for ways to transition from the slow and opaque wire transfer and correspondent banking models to more competitive methods.
Much of the hoopla and new interest is related to blockchain and CBDCs, as cryptos have gained some momentum. But as HSBC reminds us, there are still ways to deliver better experiences using existing local rails.
‘To start off with, Global Wallet is available for customers in Singapore, the UK and the US, with more markets also coming soon….As with HSBC’s earlier Global Money Account and PagoFX, Santander’s low-cost international transfer service, all are trying to shore up the traditional banks’ international payments businesses against fintech competitors like Wise and Azimo….Meanwhile, these fintechs are fighting to carve out a chunk of the SME market by offering a low-cost solution that undercuts what most banks offer.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group