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Use cases as the currency of cross-border payment innovation and optionality

Written by Foo Boon Ping

Senior banking and payments leaders in Hong Kong gathered at a roundtable discussion to examine how the financial services industry can navigate the new landscape of cross-border payments.

With rising customer expectations, evolving regulatory frameworks and the emergence of new payment rails, a closed-door roundtable dialogue among Hong Kong’s leading banking and payments practitioners underscored the importance of collaboration, innovation and strategic focus.

From instant expectations to institutional trust

A recurring theme throughout the discussion, hosted by TAB Global in partnership with Visa International, was the rising expectations of customers across all segments, particularly small and medium-sized enterprises (SMEs), gig or independent workers, as well as marketplace and digital platform users. These clients increasingly expect real-time, transparent and low-cost cross-border payments that resemble the experience of domestic retail payments. In the Hong Kong context, this is especially evident among SMEs operating in the Greater Bay Area (GBA), as well as among individuals managing personal remittances and payments.

As one participant noted, "The challenge is not just speed but how to maintain anti-money laundering (AML) compliance and user confidence when customers expect instant transfers." Customers are no longer comparing banks against each other but against fast-moving digital-first services. Senior director of Visa Direct Asia Pacific, Eric Tan, observed that many customers regularly switch providers in search of better speed, transparency, and pricing. He cited Visa's partnership with a Singapore-based bank to enable real-time payments into China via AliPay and WeChat Pay, transforming a process that once took days into one completed in under a minute.

The demand for instant experiences is growing yet remains uneven across customer segments. While retail users seek cost savings and speed, corporate treasurers and chief financial officers (CFOs) prioritise liquidity visibility, settlement finality, and robust reconciliation data. This bifurcation is especially pronounced in Hong Kong, where the client base ranges from regional SMEs to multinational conglomerates. These differing priorities require financial institutions to strike a balance between immediacy and integrity—delivering frictionless user experiences without compromising controls, governance, or trust.

The expectations surrounding immediacy also reflect broader behavioural shifts. Customers today expect to see payment confirmation within seconds, regardless of the underlying complexity. This has placed added pressure on banks to redesign internal workflows, adopt straight-through processing, and integrate with faster payment schemes such as Fast Payment System (FPS) in Hong Kong or PromptPay in Thailand. The benchmark for success is no longer the institution's operational efficiency, but the customer's perception of seamlessness.

Competing on experience, not just infrastructure

Participants acknowledged that banks in Hong Kong now compete in a broader ecosystem that includes electronic or e-wallets, fintechs and alternative payment providers from across Asia. Differentiation requires banks to offer more than infrastructure; they must deliver seamless, intelligent customer experiences. The challenge lies not only in building functionality but in simplifying the decision-making process for customers.

Some institutions are embedding fintech partners to deliver fast and familiar cross-border flows, particularly where they lack correspondent banking presence. Others are investing in internal capabilities to retain control over the customer journey. One bank noted that customers are increasingly overwhelmed by the variety of payment routes and systems—SWIFT, Real-time Gross Settlement (RTGS), FPS and Global Payment Innovation (GPI) among them. "Customers get overwhelmed with terms like SWIFT, RTGS, FPS, GPI. They want us to recommend the best option, not offer a menu," said one participant.

In this context, data has become a key differentiator. Institutions are using behavioural insights, artificial intelligence (AI)-driven decision engines, and customer segmentation to drive smarter routing and pricing decisions. The ability to personalise cross-border payment flows while maintaining security and simplicity is emerging as a core value proposition.

Moreover, banks are beginning to realise that experience is shaped not just by digital interfaces but also by how well services are contextualised. For example, foreign exchange transparency, real-time status updates, and proactive error handling are features that customers increasingly associate with a “good” payment experience. In this regard, the race is not just for technological superiority but for user-centric service design—something Hong Kong’s globally connected but operationally cautious institutions are striving to adopt.

Scaling optionality through innovation and relevance

Delivering payment optionality at scale was identified as both an aspiration and a constraint. Real-time tracking, flexible routing, and built-in compliance are increasingly demanded but difficult to deliver across disparate infrastructure and regulatory regimes.

Senior manager of Visa Direct Asia Pacific, Eugene Ong highlighted the company’s enablement of multiple delivery endpoints, including account-to-account, account-to-wallet, and account-to-card. These are being deployed to support use cases such as gig economy payouts, international tuition fees, and digital commerce settlements.

Banks described the trade-offs they face in enabling such optionality. While some invest in proprietary technology to retain control, others opt to partner for agility and faster time-to-market. Several participants agreed that optionality must be anchored in usage: "You cannot offer too many corridors that no one uses. Optionality must be driven by real demand."

Cross-border innovation requires not only building diverse corridors but also embedding intelligence into routing decisions, ensuring that payments are optimised for cost, speed, and compliance in real time. Scaling such innovation calls for banks to develop common protocols, adopt open application programming interface (API) frameworks, and align with global standards such as ISO 20022. As banks in Hong Kong increasingly position themselves as regional gateways, these capabilities are essential for interoperability with China, ASEAN, and other key corridors.

More importantly, optionality must also be viewed through the lens of trust. Offering multiple rails and corridors without ensuring end-to-end predictability can erode client confidence. As one participant noted, "If a customer does not know when a payment will arrive or what charges will be deducted, they would not use it again—regardless of how fast it is." True flexibility, therefore, involves aligning optionality with transparency and reliability.

Fortifying resilience while chasing speed

Participants were candid about the regulatory challenges of supporting cross-border flows. Hong Kong’s evolving AML and Counter Terrorist Financing (CTF) landscape, Virtual Asset Service Provider (VASP) licensing requirements, and participation in cross-border fintech pilots were cited as double-edged swords: they offer opportunity for innovation but also increase compliance overhead.

Several banks shared their efforts to re-architect systems to support real-time AML screening, anomaly detection, and automated reporting. These capabilities are essential for balancing the demand for instant payments with the need for fraud prevention and compliance.

Tan detailed Visa’s approach to fraud and compliance risk, which includes three layers of defence: customer authentication by the bank, internal controls and AI-based risk modelling, and compliance with jurisdiction-specific regulatory obligations. He noted that Visa monitors behavioural anomalies—such as sudden high-value transfers to new jurisdictions—to trigger manual reviews and prevent fraudulent or mistaken transactions.

The conversation also spotlighted the increasing significance of operational risk (ops risk) in the cross-border payments space. As banks strive to offer real-time services, they face heightened vulnerability to fraud, cyberattacks, human error and system outages. One participant observed that while retail authentication processes are becoming more robust—using location tracking, device identity and behavioural analysis—corporate transaction controls still rely heavily on static methods like passwords and manual approval workflows. The disparity adds friction to corporate flows and increases risk exposure.

There was also discussion on the systemic nature of operational risk in cross-border payment networks. Unlike isolated product lines, these risks are interconnected and potentially amplified by upstream and downstream service providers, including correspondent banks and technology vendors. Banks in Hong Kong, many of which operate as regional hubs, acknowledged the need to adopt shared risk frameworks and stress-testing protocols to reduce vulnerability.

Despite efforts to mitigate these challenges, participants noted the lack of harmonisation across jurisdictions and limited fraud data sharing. Calls were made for deeper industry coordination and public-private partnerships to support safe innovation and to enhance resilience across both retail and institutional payment channels.

Seizing growth at the edge of ecosystems

Discussion turned to the segments and use cases most likely to drive the next wave of growth. The consensus was clear: SMEs, embedded finance and real-time collections represent key opportunities.

Visa’s Tan highlighted the rise of wallet-based collections in Africa and Southeast Asia, as well as increasing demand for account-to-wallet and account-to-card solutions. He stressed that banks must consider whether to build these capabilities internally or partner with providers that offer access to underserved corridors.

One local bank shared an example of quick response (QR) code-based payments for taxis, which simplified collections and removed the need for expensive terminals. Another cited the expansion of FPS-based cross-border flows with China, including person-to-person transfers and forthcoming business-to-business options.

Education, healthcare, and digital goods were named as fast-growing verticals, especially as platforms seek embedded finance capabilities. In Hong Kong, banks are looking at how to embed payments into platforms serving cross-border consumers, particularly in the GBA.

Beyond industry verticals, several banks noted that embedded finance—particularly in logistics, e-commerce, healthcare and travel—will become a defining frontier. These use cases often operate at the edge of ecosystems, in underserved corridors or non-traditional customer segments. To win these flows, banks must act quickly and collaboratively, building relevant use cases that integrate payments seamlessly into digital journeys.

Owning less, orchestrating more

Throughout the roundtable, a recurring message emerged: no institution can go it alone. In a market like Hong Kong, where competition is intense and customer expectations are high, collaboration is essential.

Banks must selectively partner—with fintechs, global networks like Visa, and even each other—to deliver value-driven solutions. The focus must shift from ownership to orchestration. "Success will come not from owning everything, but from knowing where to partner, where to lead, and how to listen," one participant concluded. The next phase of cross-border payments will be defined by interoperability, security and customer relevance. For institutions in Hong Kong and beyond, the task ahead is to build ecosystems that enable scale, trust, and innovation—and to do so with clarity of purpose.