Cross-border transactions at Citi increase in the third quarter of 2024, attributable to the introduction of novel products
Citi Launches New Cross-Border Liquidity Platform, Boosting Global Payments
Interest in digital currencies and cross-border payments is surging among financial institutions, with Citi being the latest to join the movement. The global bank has announced the launch of its new platform, Citi Token Services for Cash, built on a private blockchain.
Citi's partnership with Mastercard Move enables near-instant payments from 65 countries to 14 receive markets. This new platform is another addition to its wider transaction banking offering, focusing on the area of cross-border payments.
The launch of Citi Token Services for Cash highlights the continued significance of cross-border payments for the world's biggest financial institutions. In Q3 2024, Citi's cross-border transaction value increased by 8% to $95bn, bringing the total for the year to $278bn. This growth was a major factor in Citi's 11% Non-Interest Revenue (NIR) growth (excluding the impact from the devaluation of the Argentine peso) in Q3 2024. Payments accounted for 32% of TTS revenue and 6% of Citi's overall revenues in Q3 2024.
J.P. Morgan has also developed a similar solution, Onyx. However, Citi's platform is owned and operated by the bank. TTS, a significant part of Citi's business, grew by 4% in Q3 2024, with non-interest revenue growing by 41% in the same quarter, faster than earlier quarters this year.
When comparing cross-border transaction costs among banking providers, it's essential to evaluate multiple fee components and service features. These include transaction fees, currency exchange fees, intermediary or correspondent bank fees, receiving bank fees, withdrawal fees, processing speed and settlement time, limits and restrictions, compliance and regulatory checks, and more.
To conduct a detailed comparison, consider the following steps:
- Request or research detailed fee schedules for each provider, including hidden fees like exchange rate markups and intermediary bank charges.
- Consider the payment routing complexity. Providers using local payment networks often have lower fees due to fewer intermediaries and faster settlement but may be limited by country or payment size.
- Evaluate speed and reliability as important non-cost factors that can affect overall value.
- Explore newer payment options such as digital currencies or fintech platforms, which may reduce fees and processing times but come with trade-offs like regulatory risks and limited acceptance.
- Check provider-specific compliance processes and anti-money laundering checks, as they influence transaction time and costs.
By creating a comparison matrix listing each provider’s fee types and amounts, payment routing details, speed, available currencies, and any transaction limits, businesses can pick the best cost-effective option for their cross-border needs.
It's important to note that clients need to be in Mastercard-approved markets to use Citi's new service. Payment types enabled by this integration include insurance payouts, compensation payments, ecommerce payments, and more.
As the digital currency movement gains traction in the banking sector, it's clear that cross-border payments will continue to play a significant role in shaping the future of global finance.
- The launch of Citi's new platform, Citi Token Services for Cash, underscores the integration of technology in business and finance, particularly in the realm of cross-border payments.
- As the digital currency trend intensifies among financial institutions, the significance of technology in business and finance, especially in cross-border payments, becomes increasingly apparent.
