Cross-border activities escalate at Standard Chartered in Q1 2025, fuelled by tariff worries
In the competitive landscape of cross-border payments, providers are vying for market share by offering lower fees, improved transparency, and optimised exchange rates. One such player, Standard Chartered, reported a full-year 2024 cross-border network income of $7.3 billion, with Transaction Services accounting for 64%, Global Markets for 23%, and Global Banking for 13%.
The bank's top-line revenue growth was driven by gains in its Corporate & Investment Banking (CIB) division, which forms the backbone of its cross-border payments offering. In FY 2024, US-related corporates generated 7% ($0.9bn) of Standard Chartered's CIB income.
Standard Chartered operates in seven key market corridors, generating over $100 million network income annually. Approximately $0.4bn of this income was attributed to income from non-US clients who generate over a tenth of their sales from exports to the US. Additionally, around $0.4bn was from US corporates sending outbound payments, and $0.1bn was from payments income captured in the US from non-US corporates.
The bank's strategic approach to cross-border payments involves reducing exchange rate markups, minimising intermediary fees, offering transparent pricing, and tailoring fees to volume or payment methods. This helps attract businesses seeking cost-efficient, fast, and reliable cross-border payments in key corridors.
In terms of volume-based pricing, providers like Fondy offer lower rates to merchants processing larger volumes. Fondy also includes comprehensive features such as fraud protection and multi-currency support within its base price, reducing additional costs for businesses.
Furthermore, Standard Chartered is increasing its presence in international capital and FX markets for financial institutions, having invested in digital capabilities for FX trading. The bank is also emphasising ongoing efforts to diversify its supply chain for corporates, including onboarding 10 regional treasury centres.
In Q1 2025, Standard Chartered estimated income from cross-border payments to be around $2 billion. The bank is expected to discuss its tariff exposure and future strategy during its CIB investor day later this month. The quarter saw a 5% Year-over-Year (YoY) increase in operating income to $5.4 billion.
Sources: 1. Fondy Pricing: https://www.fondy.com/pricing/ 2. Trolley: https://www.trolley.co/ 3. Wise: https://wise.com/ 4. Visa B2B Connect: https://www.visa.com/businesses/connect/visa-b2b-connect/ 5. Mastercard Cross-Border Services: https://www.mastercard.us/en-us/business/products/cross-border-services.html
Finance plays a crucial role in Standard Chartered's approach to cross-border payments, as the bank aims to attract businesses by offering cost-efficient solutions, such as lower exchange rate markups and minimized intermediary fees. In addition, investing in digital capabilities for FX trading and emphasizing ongoing efforts to diversify its supply chain for corporates are part of Standard Chartered's strategic business plan.
