FEATURE: CROSS-BORDER PAYMENTS
According to the report, Fintechs and other digitalfirst players are moving in fast, growing their share of the market from 25 % in 2024 to a projected 37 % by 2028. They offer what SMEs crave: faster settlement, transparent fees and seamless integration with the digital tools they use daily.
Traditional banks, by contrast, are said in the study to often rely on outdated systems and complianceheavy processes that drive up costs and slow down transactions. A representative from a Mexican bank put it bluntly:“ Compliance and regulatory costs are our biggest challenge. We must have too many people dedicated to KYC / AML monitoring and legal requirements, making acquisition costs extremely high.”
For SMEs, the study says, that complexity translates into higher prices and more friction. As a Banco Pichincha executive noted:“ Price is the main issue. We( the banking industry) are losing customers because costs are too high and they turn to less reliable players.”
The hidden cost structure
The Mastercard research also highlights a critical point: high SME costs are not just the result of bank margins. The banks themselves are facing high operational expenses when serving SMEs, with correspondent banking fees making up 40 % to 60 % of total costs and manual processing, compliance and customer service adding another 40 % or more.
This double burden creates a lose-lose scenario: SMEs are overpaying for subpar service and banks are struggling to make the economics work.
Mastercard’ s answer: Mastercard Move
To address these challenges, Mastercard is pushing for a structural redesign of the cross-border payment system for SMEs, the study says, outlining its solution, Mastercard Move, as a portfolio of money movement capabilities designed to make international payments faster, cheaper and more transparent.
Key benefits include:
• Cost efficiency – reducing intermediaries and eliminating hidden fees
• Transparency – providing real-time traceability of costs and delivery times
• Speed – enabling same-day or even real-time settlements in more than 150 markets
Walter Pimenta, Executive Vice President, Commercial and New Payment Flows at Mastercard for LAC, said:“ Small and medium-sized businesses are the silent engine of Latin America. They innovate, generate employment and keep our economies alive. To reach their true potential they need more than resilience: they need a financial infrastructure that accompanies them on their global journey.”
He added:“ We are reimagining how international payments should work for SMEs: simply, securely and adapted to their realities. With Mastercard Move, we help banks lead this transformation, providing them with tools to offer comprehensive solutions that impact where it matters most: liquidity, agility and trust. Today’ s SMEs are tomorrow’ s multinationals. And together we can build the infrastructure they deserve.”
Mastercard Move at a Glance
• Coverage: 150 + markets for same-day or realtime payments
• Transparency: Real-time cost and delivery tracking
• Cost savings: Fewer intermediaries and hidden fees
• SME focus: Solutions adapted to small business needs
Lessons from fintechs: the digital-first blueprint
The study says Fintechs have already shown that cross-border payments can be handled differently. Their platforms focus on intuitive interfaces, instant
26 INTELLIGENTCIO LATAM www. intelligentcio. com