Cross-border payments have moved from being a back-office chore to a boardroom priority. Worth over $200 trillion a year and growing, they shape how companies expand, hire, and compete globally. Our guide breaks down the challenges — from FX costs to compliance — and shows how modern API-first solutions unlock speed, transparency, and growth. If you want your business to not just pay across borders but grow across them, this is the read.
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Cross-border payments are international transactions that power global trade, investment, and hiring.
At their simplest, they are financial transfers between two or more countries. But in practice, they cover everything from consumer e-commerce purchases to billion-dollar acquisitions.
There are two main types:
The scope is wide, but the principle is the same: moving money securely across jurisdictions to support global activity.
Cross-border money transfers don’t physically cross borders — they move through accounts in different jurisdictions.
In the simplest case, a bank debits money in one country and credits it to a corresponding account in another. More complex transfers may pass through several intermediaries, adding time and cost.
Transfers can be carried out via:
The mechanism chosen affects speed, cost, and transparency — three areas where businesses feel the impact directly.
Businesses need cross-border payments to trade globally, expand markets, pay workers, and invest.
These transactions underpin several core activities:
International trade: companies use them to buy and sell products overseas. For example: A retailer sourcing goods from Asia depends on smooth international payments to keep stock flowing.
Global expansion: cross-border transfers let businesses enter new regions that would otherwise be inaccessible. For example: A European SaaS startup can scale into the US by receiving customer payments in dollars.
Remote workforce: global hiring is only possible with reliable international payroll. For example: A tech company with developers in multiple countries needs to pay salaries across currencies every month.
E-commerce and digital transactions: online platforms like Amazon wouldn’t exist without international payment rails.
Investments and acquisitions: cross-border deals and services rely on large-scale transfers, often involving multiple banks.
In every case, payment infrastructure has the potential to become the "invisible enabler of growth."
Banks settle cross-border payments through correspondent accounts and interbank networks.
In practice, this means debiting funds in one location and crediting them in another, often through several intermediaries. Each step adds cost, delay, and potential for error.
Payment providers can:
The choice of settlement method directly influences cost efficiency and transaction speed.
Settlement times range from instant to a week, depending on method and intermediaries.
Typical timeframes:
For businesses, these delays can impact supplier relationships, cash flow, and customer satisfaction. That’s why many now prioritise providers offering 24-hour or faster settlement.
Getting international payments right isn’t just about speed. The biggest differentiator is cost — and that cost is shaped by more than a single transfer fee.
When money crosses borders, several charges stack up. The exchange rate spread is often the most significant, especially at scale. A small percentage difference compounds quickly when you’re paying suppliers or staff across currencies. Add to that the transfer fees, the intermediary deductions that creep in along certain routes, and the compliance checks that can slow things down. Even failed or returned payments eat into both budgets and patience.
Price transparency in this market isn’t optional — it’s survival. Instead of focusing on headline rates, the smarter question is: “If I send €10,000, how much arrives in the recipient’s account, and how long does it take?”
From there, insist on clarity around:
1. The FX basis — is it pegged to mid-market, and when was it fixed?
2. All-inclusive fees — transfer, FX, and any intermediary deductions up front.
3. Corridor realities — some currencies or routes will always take longer or cost more.
There are practical ways to bring costs down while maintaining compliance and security:
Timing also matters. Align payments to avoid weekend or holiday bottlenecks, and make sure recipient data (like IBANs or SWIFT codes) is clean to prevent expensive errors.
Ultimately, you can’t manage what you don’t measure. Track not just the cost of a transfer, but the effective FX variance against mid-market, the all-in cost per payment, and the percentage of transactions delivered within 24 hours. Equally, keep an eye on return rates and supplier disputes linked to fees. Those are the signals that show whether your cross-border payments are supporting growth — or silently eroding margins.
Bottom line: Controlling cross-border costs isn’t about squeezing pennies on fees. It’s about securing transparency, reducing uncertainty, and making sure every euro or dollar you send actually lands where it should.
Cross-border payments unlock growth, but they remain costly, complex, and vulnerable.
Despite rapid innovation, several challenges persist:
Fluctuating exchange rates and conversion fees add cost and uncertainty.
Companies must manage spreads, sudden rate changes, and conversion costs that erode margins. Even when using stable currencies like USD, EUR, or GBP, unpredictable swings complicate planning.
Multiple intermediaries and regulations drive up fees.
Every step in the chain adds charges: correspondent banks, currency conversions, and compliance checks. For businesses sending frequent payments, these costs add up quickly.
Each border adds a new set of regulations, increasing risk.
Compliance checks protect against fraud, sanctions, and financial crime — but they also create friction. Payments may be delayed or declined for reasons that seem trivial but reflect jurisdictional differences. Non-compliance risks fines and reputational damage.
Cross-border payments attract fraud and cybercrime.
Sensitive financial data must be protected at every step. Banks and businesses face major risks if funds are intercepted or data is breached. Regulators like the UK, EU, and Japan impose strict privacy rules, adding another layer of responsibility.
Intermediaries and uncommon currencies slow things down.
While instant transfers are possible, many payments still take days. Customers and suppliers increasingly expect real-time processing, so slow corridors create frustration and lost trust.
Transparency is limited, making tracking and reconciliation difficult.
A survey by SWIFT and EuroFinance showed 64% of corporates want real-time payment tracking, while 47% demand clearer visibility on costs. Without transparency, hidden fees pile up and trust erodes.
Different tax systems create double taxation risks and accounting headaches.
Even with treaties, companies must carefully assess their tax position before entering cross-border contracts. Mistakes in this area lead to penalties and unnecessary costs.
The advantages outweigh the challenges, opening growth opportunities worldwide.
Modern APIs expand payment options and support multi-currency accounts.
Businesses can receive payments globally in local currencies, making it easier to scale into new markets. This flexibility also improves customer experience by offering localised options.
Cross-border payments make global trade possible.
The B2C e-commerce market alone is projected to reach $8.15 trillion by 2026. Without reliable cross-border infrastructure, global online marketplaces would not exist.
Cross-border payments unlock untapped customers and suppliers.
Mobile commerce is particularly strong in emerging markets, and being able to transact in local currencies helps businesses grow into these regions.
Global payments reduce dependency on single markets and suppliers.
Modern systems beat legacy banks on speed, cost, and transparency.
With API-first solutions, 57% of international transfers can be instant and 90% clear within 24 hours. Real-time insights and competitive FX rates help businesses make smarter, faster decisions.
Mobile-enabled platforms and subscription tools simplify global payments.
Merchants can manage invoices, recurring payments, and approvals from multiple devices. International standards are gradually improving, promising even faster, more efficient payments.
Success depends on choosing the right methods and platforms.
Practical steps for businesses:
The right mix saves time, reduces costs, and builds trust across markets.
Cross-border payments are the backbone of the global economy in 2025.
They enable companies to expand, diversify, and compete worldwide. While challenges remain — from costs to compliance — modern solutions make international transactions faster, safer, and more transparent than ever.
For finance leaders, the takeaway is clear: cross-border payments aren’t just about moving money. They’re about unlocking growth. Businesses that master them don’t just pay across borders — they grow across borders.
Simon Shohet, Finance and Strategy Senior Manager at Alma, says of his cross-border payments experience:
Payhawk's international payments functionally means we now have one platform to manage our payments, from employee reimbursements to paying suppliers across different currencies, including USD. We love that we don't have to switch between different providers to make payments and have a complete overview of spend in Payhawk!
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