Money movement sits at the center of every modern business. Thanks to digitization, money can move faster than ever. In 2024, consumer digital payment spending grew to nearly $50 trillion globally. At that scale, the payment systems that move funds across banks, payment networks, and borders are extremely powerful. But they’re also complex and sometimes difficult to understand.

Below, we’ll explain how money movement works and what it takes to make those flows faster, safer, and more reliable.

What’s in this article?

• What is money movement?
  
• How does money movement work?
  
• What systems route and settle funds?
  
• How does money movement affect cash flow for businesses?
  
• What issues can disrupt money movement?
  
• How can organizations modernize money movement?
  
• How Stripe Payments can help
  

What is money movement?

Money movement is the behind-the-scenes process that shifts funds from one account to another. Banks and payment systems adjust balances across their ledgers to reflect who owns what.

A money transfer is a coordinated series of ledger updates across financial institutions. Money movement depends on a reliable, interconnected set of systems that can transmit instructions, validate details, and settle transactions accurately.

Businesses depend on money movement to collect revenue, pay expenses, keep teams paid, and maintain liquidity day to day. Faster payment options such as real-time bank transfers create new opportunities for more immediate commerce, and new digital methods expand access. Digitization has also raised the volume and sophistication of fraud attempts, which means security has to keep pace.

How does money movement work?

Once a payment is initiated, two things need to happen: the payment must be routed to the right destination, and it must settle so the money moves between institutions. Cross-border transactions are generally more complicated than domestic transactions.

Here’s how money moves.

Routing

Routing is the process of determining which institution should receive the funds and sending the instruction through the right channel. Domestic payment networks such as Automated Clearing House (ACH) and Real-Time Payments (RTP) in the US, Faster Payments in the UK, and the Single Euro Payments Area (SEPA) in Europe use account numbers, routing codes, and standardized formats to deliver transactions to the correct receiving bank. Card networks operate similarly when a card is swiped or tapped, sending the authorization request from the business to the cardholder’s issuer in real time and relaying the response within seconds.

Settlement

Settlement is the moment when value shifts between institutions. For direct debits or card payments, banks often settle using net amounts, tallying all transactions over a period and moving one consolidated figure. Real-time payment systems and real-time gross settlement (RTGS) systems settle each transaction individually in central bank money, which makes the transfer final as soon as it posts. Then, each bank updates its customers’ balances to reflect the new funds.

Cross-border payments

International payments are more complicated because there’s not a single global clearinghouse that all organizations use. Banks rely on correspondent banking networks and Society for Worldwide Interbank Financial Telecommunications (SWIFT) messages to pass instructions across borders. The money moves through nostro and vostro accounts, prefunded balances that banks hold with partner institutions abroad. This multibank chain can slow settlement, add costs, and introduce more points where a payment can stall or be flagged for compliance review.

What systems route and settle funds?

Payment networks are the pathways that let payments travel from one financial institution to another. They determine the speed, cost, data quality, and reliability of every transaction.

Bank transfers

In the US, ACH moves huge volumes of payments (e.g., payroll, supplier payments, bill pay) in batch cycles. This keeps costs low but means settlement usually takes a day or more, depending on cutoff times and processing windows. Many regions have similar systems, such as Europe’s SEPA, built around the same principles of scale and stability.

Card networks

Card networks route transactions for a lot of consumer-to-business spending. The authorization happens in real time, giving an instant “approved” or “declined,” while fund settlement between banks happens later through a netting process. The pros of this system include built-in fraud controls and wide acceptance, but fees can be higher.

RTGS systems

RTGS systems, such as Fedwire in the US and T2 in Europe, settle each payment individually in central bank money. Transfers clear within seconds or minutes and are final once processed, which makes these payment methods necessary for treasury teams that manage liquidity or large corporate transfers. They tend to cost more but deliver unmatched speed and certainty.

Instant payments

Real-time payment networks are expanding worldwide. In the US, the RTP network and FedNow offer instant settlement. Europe’s SEPA Instant Credit Transfer and India’s Unified Payments Interface provide similar capabilities at national scale. These networks support richer data formats and run 24/7, making them well suited for payroll disbursements, supplier payments, customer refunds, and marketplace payouts.

Digital wallets

Digital wallets are changing how businesses and people initiate and receive payments. They combine the power of traditional banking networks with that of new ones, often on blockchains. Emerging networks, such as certain stablecoin systems, offer new ways to move value globally, although enterprise use is still early and varies by jurisdiction. Digital wallets are expanding what money movement can look like.

How does money movement affect cash flow for businesses?

A business’s cash flow is shaped by how quickly money comes in and goes out and how visible those movements are.

Here’s how the mechanics of money movement affect cash flow.

Faster inflows improve working capital

When payments clear quickly, revenue becomes usable cash sooner. Over hundreds or thousands of transactions, that timing shift leads to stronger working capital and less dependence on short-term financing. Businesses that adopt faster payment methods can see shorter settlement collection cycles, fewer cash gaps, and more flexibility in how they manage operating expenses.

Predictable outflows sharpen control

Real-time confirmation of outgoing payments gives finance teams a clear picture of daily cash positions, which minimizes surprises and tightens forecasting. Being able to pay suppliers or partners at the right time keeps more cash liquid for longer without risking late fees or strained relationships.

Global operations amplify the impact

Long settlement windows, multiple correspondent banks, and currency conversions can keep funds in transit for days. Faster, more integrated cross-border payment systems shorten that timeline and give companies better control over global liquidity, especially for those that move revenue between subsidiaries or regions.

What issues can disrupt money movement?

Even with modern infrastructure, payments can still get delayed, flagged, or stuck.

Here are the potential issues that affect money movement:

• Fraud and security threats: Attacks such as account takeovers and altered payout details can cause holds or manual reviews that slow legitimate transfers.

• Compliance issues: Payments, especially international ones, must satisfy strict regulatory checks. Missing or incomplete data can force banks to pause transactions while they request more information.

• Legacy systems and downtime: Many networks still operate on batch cycles or limited hours, and outages or maintenance windows in banking systems or clearing networks can pause payments entirely.

• Fragmentation and intermediaries: Cross-border transfers often pass through several correspondent banks, and each stop adds time, cost, and another checkpoint.

• Human error: Typos, outdated integration codes, or incorrect account information often require human intervention to resolve.

How can organizations modernize money movement?

Money movement upgrades can improve cash flow, reduce manual work, and create a better experience for customers, suppliers, and internal teams.

Here’s how to get started:

• Use a multinetwork strategy: Give your systems the ability to route payments over bank transfers, real-time payments, and card networks. Real-time networks typically settle funds within seconds, 24/7.

• Engage global payment APIs: Use global payment providers like Stripe with unified application programming interfaces (APIs).

• Automate payment workflows: Integrate enterprise resource planning, billing, treasury, and payout systems directly with banks and payment providers. Modern data standards such as International Organization for Standardization (ISO) 20022 help payments move cleanly from initiation to settlement.

• Strengthen security and compliance tech: Run automated Know Your Customer (KYC), sanctions screening, and fraud monitoring tools in real time through regulated providers.

How Stripe Payments can help

Stripe Payments provides a unified, global payment solution that helps any business accept digital wallet payments online, in person, and around the world.

Stripe Payments can help you:

• Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 100+ payment methods, including more than a dozen digital wallet payment methods, and Link, a wallet built by Stripe.

• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.

• Unify payments in person and online: Easily track and reconcile digital wallet payments across online and in-person channels.

• Improve payment performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.

• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.

Learn more about how Stripe Payments can power your online and in-person payments, or get started today.