Cross-border payments are a lifeline for some. This is why they should be available to all

It’s hard to imagine that one year ago as we brushed up our armchair epidemiology and adjusted to a world that had changed overnight, the words ‘furlough’ or ‘paycheck protection package’ were only just entering our lexicons. In societies where jobs weren’t protected, millions found themselves in precarious financial positions. For these people, receiving payments from friends and family abroad has been a lifeline.

We’ve experienced a year beset with worry – about our health and the health of our loved ones, and for many, concern about their livelihoods and simply surviving financially from day to day have added to the emotional toll of the pandemic.

While many simply transitioned their workdays into the virtual office, from one moment to the next COVID-19 reduced or took away completely the earning potential of those in informal employment or the gig economy, leaving them reliant on the help of friends and family, often those based abroad.

Yet, these people who work abroad and regularly support their families at home suddenly found themselves in an unprecedented situation. They were unable to get home. Historically, a lack of transparency around international payments and uncertainty around speed and associated fees has meant that many still opt to travel back home in person to deliver funds, rather than rely on cross-border payments.

The decline in the use of cash during the pandemic has been well documented, supported by people and governments alike. But for those whose primary means of transferring money internationally was an annual trip back home, this transition became hugely problematic.

The past year has forced us to prove our resilience and become adaptable, to find solutions at an unprecedented pace. With grounded flights and closed borders, the pandemic has led people to adopt new technologies and embrace digital money transfer to get vital funds back to those who were otherwise financially stranded by the shutdown.

Financial anxiety has been a significant feature of the pandemic for many. Mastercard’s Borderless Payments Report states that over half of those people who made cross-border payments during the pandemic did so because they were concerned about the financial survival of their friends and family abroad. 45% said that their family abroad had lost jobs and needed more financial help. Ensuring a continued flow of money to all corners of the world, despite closed physical borders, became an unseen, but critical requirement for people’s livelihoods throughout the pandemic.

The research also uncovered that 40% of people have said that the only way they have survived the pandemic is by receiving money transfers from friends and family abroad. With stakes this high, the ability to move money safely, quickly and reliably has never been so critical.

A quarter of those surveyed sent more than half of their earnings abroad, with those from India but working in another country, sending nearly two-thirds of their earnings to their family. International travel bans during the pandemic have meant that 75% of people who usually travel home to give their family money have had to find alternative ways of getting funds to them.

Shashank is one such worker. Like many Indian nationals, he sought work in the Gulf, settling as a university administrator in Dubai. Providing financial support to their families is a point of pride for many migrants. This is especially so for Shashank: As a self-professed ‘Indian son’, he feels culturally obligated to ‘give back’ to his family.

“I make sure every month, as the son of the family, to send something to them.”

Sending money is also a means by which migrants feel as if they are in two places at once: providing a contribution to the household income keeps them connected to home while they are temporarily overseas.

New technologies have enabled Shashank, and many others, to ensure payments can be made to family members in a timely and transparent way.

One day we’ll see a world where we can travel freely again. But in the meantime, it’s critical that financial institutions work towards technological solutions that make international payments as seamless as domestic ones.

There is the technology to split a meal with a friend and transfer a share of the cost in seconds, or to pay utility bills with a few taps of a smartphone, knowing that it will arrive that same day and with no hidden charges. These solutions should be available to every individual in every location, so that making and receiving digital payments can happen with confidence and certainty, even across borders. Many depend on it.