What are cross-border payments? Methods, costs, and strategies

Moving money across borders is a core part of how global businesses operate. You use these payments to pay international vendors, manage remote teams, or collect revenue in multiple currencies. However, with multiple currencies, banking networks, and regulations involved, even a simple transaction can become complex and costly if you’re not set up for it.

What are cross-border payments?

Cross-border payments are financial transactions in which the sender and recipient are located in different countries. They involve the movement of money across national borders, often requiring currency exchange and coordination between multiple banks or financial intermediaries.

In business, cross-border payment methods cover a wide range of activities, including paying international suppliers and contractors to receive revenue from global customers. They can involve bank wires, credit card payments, digital wallets, and international ACH transfers.

Unlike domestic payments, cross-border transactions must account for foreign exchange rates, country-specific regulations, and international banking networks. Each step adds complexity and potential cost.

Cross-border payments generate billions in global revenue. This volume continues to grow as more businesses expand internationally and global commerce moves online. What makes these payments different is the added layers of compliance, currency conversion, and clearing systems that vary by region and transaction type.

Common cross-border payment examples

Any time funds move between entities in two different countries, it qualifies as a cross-border payment. That includes payments between businesses, individuals, banks, and digital platforms.

You don't need to wire money to a foreign bank account for it to count. Paying a remote contractor, sending funds to a supplier overseas, or receiving a customer payment in a different currency all fall under cross-border transactions.

Even marketplace platforms like Amazon, Shopify, and Airbnb process millions of cross-border payments daily. In fact, cross-border e-commerce reached $1.6 trillion in 2023, and it’s expected to grow by 25% year over year.

Your cross-border payments also include:

• Card transactions made abroad
• International payroll
• Recurring SaaS payments billed in foreign currencies
• Intercompany transfers between global subsidiaries

If money leaves one country, lands in another, or changes currency along the way, you've made a cross-border payment.

How cross-border payments work

Cross-border payments rely on a network of banks, payment processors, and clearing systems to move money between countries. Unlike domestic payments, there’s no single global payment infrastructure. This is why each transaction often passes through multiple intermediaries.

• Step 1: The sender initiates the payment. The process starts when a business submits a payment request through its bank or a payment service provider. This includes entering the recipient’s banking details, the amount, and the currency. At this stage, it's important to double-check payment instructions. Errors here can cause delays or failed transfers.
• Step 2: The sender’s bank validates the transaction. Once the payment is submitted, the sender’s bank runs compliance checks. This includes anti-money laundering (AML) screening, sanctions list checks, and recipient details verification. The payment may be held or rejected if any red flags are found. Businesses should ensure their internal processes collect accurate and complete payment data upfront.
• Step 3: Funds pass through intermediary (correspondent) banks. If the sender’s bank does not directly relate to the recipient’s bank, the payment is routed through one or more correspondent banks. These intermediary banks act as middlemen, using the SWIFT network to communicate payment instructions. Each one may deduct fees and add processing time. Knowing how many intermediaries are involved helps estimate the total cost and time to settle.
• Step 4: Currency conversion happens. If the payment involves two different currencies, conversion happens at some point along the chain. This can occur at the sender’s bank, an intermediary, or the recipient’s bank. Exchange rates used often include a markup (FX spread), which increases the cost of the transaction. Choosing a provider that offers transparent FX pricing lowers conversion costs.
• Step 5: The recipient’s bank settles the funds. Once the funds reach the final destination, the recipient’s bank clears the payment and deposits the amount into the recipient’s account. This step may take longer in countries with slower domestic clearing systems. Businesses should build in extra lead time when sending payments to countries with longer settlement cycles.
• Step 6: Confirmation and reconciliation. Both sender and recipient receive payment confirmations, though not always in real-time. Finance teams must track each transaction's status and reconcile payment records in their accounting system. Some platforms offer real-time visibility, while others rely on batch updates or manual tracking.

This process typically takes between 2 to 5 business days, depending on the countries involved, currency conversion, number of intermediaries, and local banking regulations.

Types of cross-border payments

There’s no one-size-fits-all method for moving money across borders. Different payment systems exist because businesses have different needs. Some businesses prioritize speed to keep operations moving quickly. Others focus on controlling costs, especially when dealing with high volumes. Many require built-in currency conversion or compliance support to meet regulatory requirements.

1. Bank wire transfers

A bank wire transfer is a method of electronically sending money from one bank account to another through a secure network. Cross-border payments typically involve using the SWIFT network to move funds between financial institutions in different countries.

Bank wire transfers are one of the oldest and most widely used methods for sending money across borders. They are commonly used for high-value B2B transactions where reliability, traceability, and compliance are essential.

Settlement times usually range from 2 to 5 business days, depending on the countries involved, time zones, and the number of intermediary banks. Each intermediary can deduct a fee, which adds to the total cost of the transaction.

Wire transfers require accurate recipient details, including SWIFT codes and account numbers. Errors can lead to delays, rejections, or incorrect routing of funds.

2. International ACH transfers

An international ACH transfer moves funds between bank accounts using the Automated Clearing House (ACH) networks. These payments process in batches rather than in real-time, making them a low-cost option for sending money internationally.

International ACH is commonly used for routine transactions like global payroll, vendor payouts, royalties, and recurring invoices. It’s especially useful for businesses that send high volumes of smaller payments.

ACH transfers work by connecting local clearing systems across countries. In the U.S., ACH runs through NACHA. In Europe, SEPA handles most domestic transfers. Cross-border ACH links these networks together to enable international transactions.

Settlement takes 2 to 4 business days, depending on the countries and banks involved. Because your payments group and process in batches, they move slower than wires but cost much less.

International ACH transfers usually cost less than traditional wire payments, making them ideal for companies focused on reducing transaction fees.

However, not all countries or banks support international ACH, and availability depends on the payment provider. Businesses need to confirm whether their destination markets are supported. Like other payment types, accuracy is critical. Incorrect account numbers, routing codes, or formatting errors can delay or block transactions.

3. Card-based payments

Card-based payments involve using credit, debit, or prepaid cards to complete cross-border transactions. These payments run through global card networks like Visa, Mastercard, and American Express.

Card-based payments are widely used for international e-commerce, business travel, SaaS subscriptions, and employee expenses. These payments offer fast authorization and are easy to track, making them a go-to method for many finance teams.

When a card is used in another country or currency, the network handles currency conversion and routes the transaction to the correct issuer. This enables near-instant approvals but introduces foreign transaction fees, typically 1% to 3%, and exchange rate markups that can increase costs. Global card payments account for over 12% of cross-border consumer transactions in Europe, especially in retail, hospitality, and software sectors.

Despite convenience, card acceptance may vary by region or merchant, and in some countries, usage is limited or regulated. For businesses, the key challenge is managing the trade-off between ease of use and control over spending and FX costs.

Platforms like Ramp help address these issues by offering corporate cards with built-in spend controls, real-time tracking, and automated expense management. Ramp allows businesses to set granular rules for vendor and category-level spend, reducing out-of-policy expenses.

Additionally, its transparent fee structure and powerful integrations simplify international spend monitoring and reimbursement. This helps finance teams maintain oversight while keeping costs in check.

4. Digital wallets and mobile payments

Digital wallets and mobile payments allow users to send and receive real-time payments across borders without going through traditional banks. These platforms include services like PayPal, Wise, Revolut, Alipay, and Apple Pay.

You will find wallets widely used for international peer-to-peer transfers, e-commerce transactions, and freelancer payouts. Some platforms also support business use cases, like vendor payments or contractor disbursements.

Digital wallets streamline payments by removing the need for SWIFT codes or intermediary banks. Funds can often be transferred in minutes instead of days, especially when both sender and recipient use the same platform.

Many services offer better transparency on fees and FX rates than traditional banks. This helps businesses predict costs more accurately and avoid surprise charges. Their popularity is growing fastest in regions like Southeast Asia, Latin America, and Sub-Saharan Africa.

For low-to-mid-value cross-border payments, digital wallets offer a fast, cost-effective alternative.

5. Blockchain-based payments

Blockchain-based payments use distributed ledger technology to move funds directly between parties without relying on traditional banks or intermediaries. These transactions are recorded on a public or private blockchain, offering transparency and near-instant settlement.

Cryptocurrencies like Bitcoin, Ethereum, and stablecoins (e.g., USDC, USDT) are the most common assets used in blockchain payments. Some platforms also offer blockchain rails for fiat-backed transfers, allowing users to send traditional currencies over decentralized networks.

Unlike legacy systems, blockchain enables cross-border payments to clear in seconds or minutes rather than days. This reduces settlement risk and improves cash flow visibility.

Transaction fees can be lower than those banks charge, especially for high-value or high-frequency transfers. However, fees can fluctuate depending on network congestion. Blockchain-based cross-border payments surpassed $4.4 trillion in 2024, driven by demand for speed, cost-efficiency, and transparency.

Blockchain payments are best suited for companies that need fast, traceable, and borderless transactions. It is particularly useful in fintech, digital goods, or emerging markets with limited banking infrastructure.

6. B2B cross-border payment platforms

B2B cross-border payment platforms are built specifically to help businesses move money internationally with more control, visibility, and efficiency. These platforms offer features tailored to finance teams.

B2B payment platforms typically support multi-currency payments, real-time FX rates, invoice management, and automated reconciliation. Many integrate directly with ERP and accounting systems, streamlining frameworks, from initiation to settlement.

Popular platforms in this space include Airwallex, Payoneer, and Wise Business. These tools help reduce manual work, improve tracking, and reduce payment errors. Unlike traditional banks, these platforms often offer flat fees or transparent pricing structures, which help companies forecast costs and reduce hidden charges.

For finance teams managing multiple global vendors, recurring payouts, or international teams, B2B cross-border payment solutions offer a scalable, efficient alternative to legacy systems.

Ramp combines vendor tracking, contract intelligence, and payment management. This makes it easier for teams to control spending and streamline cross-border operations.

The costs of cross-border payments

Cross-border payments distribute costs across the sender, the receiver, and sometimes both. Who pays what depends on the payment method, provider, and currency route.

In most cases, senders cover transaction fees and FX markups, while receivers absorb deductions from intermediary or receiving banks. These hidden charges can reduce the final amount delivered, especially in multi-bank transfers.

• Foreign exchange (FX) spreads: Most providers add a markup to the mid-market exchange rate. Depending on the currency pair and provider, this spread often ranges from 2% to 4%. It’s not always disclosed upfront, which makes it harder to calculate the real cost of the transaction. Even a small spread on large or frequent payments can significantly impact your budget.
• Transfer and processing fees: Traditional wire transfers typically cost $25 to $50 per transaction. In some cases, both the sending and receiving banks charge fees. If the payment passes through intermediary banks, each one may also take a cut without notifying the sender in advance.
• Intermediary bank deductions: Payments routed through the SWIFT network often involve one or more correspondent banks. These banks deduct fees as the payment moves through the system. These charges can range from $10 to $30 per bank, and the sender has limited visibility or control over them.
• Payment delays and cash flow impact: Cross-border payments can take 2 to 5 business days to settle, especially when routed through multiple banks. These delays can cause missed due dates and strained vendor relationships. They can also create a drag on working capital, especially when managing multiple payments across time zones.
• Inconsistent FX rate timing: If your provider processes the transaction at a different time than when it was submitted, you may get a worse exchange rate. Businesses that do not lock in FX rates or use tools for rate optimization may end up paying more than anticipated.
• Manual effort and reconciliation costs: Cross-border payments often require additional contract compliance, documentation, and reconciliation steps. Finance teams may need to track down missing information, confirm receipt, or reprocess failed payments. This creates overhead that adds to the total cost, especially in high-volume environments. With Ramp, teams can reduce manual work by centralizing vendor details, renewal timelines, and transaction data. This helps avoid missed payments and contract overspending.
• Lack of transparency: Many providers bundle fees into one line item or bury them in exchange rates. Without clear breakdowns, businesses can’t easily identify where they are overspending or where to improve.

Making cross-border payments work smarter for your business

Cross-border payments remain essential to operating in the global economy, but they come with trade-offs. Choosing the right payment method depends on your goals: speed, cost control, compliance, or scalability. Businesses that understand the mechanics, cost structures, and available tools are better positioned to avoid friction and gain a competitive edge.

Whether you're sending a single vendor payment or managing a complex global finance operation, visibility and control matter. Start by mapping your payment flows, evaluating your current providers, and identifying where you are losing time or money.

With the right infrastructure in place, finance teams can streamline international payments, reduce unnecessary fees, and improve transparency without sacrificing speed or accuracy.

Ramp equips finance teams with tools to enforce vendor standards at scale—from contract visibility and automated workflows to pricing benchmarks and usage insights. Instead of reacting to vendor issues, teams can take control of their vendor ecosystem and align compliance with business goals.