The Future of Cross-Currency Payments: Insights from J.P. Morgan’s Vijay Lulla

Cross-border payments are no longer just about moving money across borders. Shifting trade dynamics and technological breakthroughs are reshaping the landscape, bringing both opportunities and challenges. Vijay Lulla, EMEA Head of Cross-Currency Payments at J.P. Morgan Payments, offers his perspective on the major forces at play.

Shifts in Cross-Border Transactions 

Payments infrastructure is evolving, driven by emerging technologies and new regional frameworks. “Several major trends are emerging, including technological advancements, regulatory changes and evolving economic relationships,” says Lulla. 

AI, digital currencies, and distributed ledger technology are no longer theoretical. “We are seeing regional payment ecosystems evolve and local currency corridors becoming more relevant,” Lulla notes, as businesses and financial institutions adapt to a more fragmented yet digitally connected payments ecosystem. These developments demand flexibility and a keen understanding of compliance, security, and operational efficiency. 

The Challenge of Real-Time Cross-Border Payments 

While real-time payments are now common domestically, achieving the same across borders remains a hurdle. The complexity stems from fragmented regulations, infrastructure mismatches, and a lack of interoperability.

The industry is making progress towards real-time cross-border payments, but achieving this as a standard will require continued collaboration between financial institutions, regulators, and technology providers

There is movement in the right direction, but challenges persist. “Efforts to harmonize regulations, improve interoperability, and upgrade infrastructure are essential steps in this journey,” Lulla adds. The next few years will be crucial in determining whether seamless, instant international transactions can become a reality. 

Reducing Errors in Transactions 

Every failed payment or delayed transaction carries financial and operational consequences. The industry is tackling these inefficiencies through improved data standards and verification methods. “Several emerging technologies and industry standards are focused on pre-validating payment details to minimize errors,” Lulla says, pointing to initiatives like ISO 20022, SWIFT Global Payments Innovation (GPI), and open banking. 

The growing use of AI and APIs is making pre-validation of payment details more robust. “We have advancement in the adoption of technologies like AI, APIs, and digital identity verification driving positive change in this space,” Lulla notes. The ability to verify payment details before execution is reducing costly errors and improving success rates. 

Where Blockchain Fits In 

Blockchain’s role in cross-border payments remains a topic of debate. While some hail it as a game-changer, adoption has been slow. Blockchain-based platforms are already streamlining payments, reducing costs, and increasing security, but practical implementation is still limited to specific use cases. 

One such example is Kinexys Digital Payments, which operates as a ‘bank account on blockchain,’ facilitating cross-border and cross-branch money movement. “Unified ledgers where tokenized assets and cash coexist on the same level also show blockchain’s potential to create a more integrated and efficient financial ecosystem,” Lulla explains. However, regulation remains a key barrier, and wider use of blockchain in payments will require collaboration with regulators and industry stakeholders to establish a secure framework. 

Key Takeaways from Sibos 

At recent Sibos, the payments industry gathered to discuss emerging trends. Lulla highlights five major themes that will shape the sector: 

• Adoption of new forms of technology, such as blockchain and AI, that are shaping the future of payments 

• Collaboration between all players in the ecosystem – public-private partnerships, fintechs and banks, and so on. It’s more of a ‘with’ than a ‘vs.‘ discussion across the payments industry 

• ISO20022 and the modernization of correspondent banking and cross-border payments – market-driven changes and commercialization opportunities 

• Instant payments and their role in the cross-border payments space 

• Changing regulatory environment and policies to help ensure consumer protection and more secure payments 

What Comes Next? 

Cross-border payments are entering a new phase, where technology, policy, and market dynamics are redefining how money moves globally. “Companies and financial institutions that can navigate these trends and adapt to changing regulatory landscapes will be well-positioned to succeed in the evolving cross-border payments landscape,” Lulla says.