Cross-border payments are transactions between payers and recipients in different countries. These payments enable businesses to purchase goods, acquire services and move capital across borders.

Cross-border payments can be slow and costly because they must move through multiple intermediaries such as banks and financial institutions. Each new banking system adds its own processing time and fees. The variety of currencies and international laws and agreements involved also complicate the payment process.

Recent technological advancements have begun to simplify cross-border payments. The blockchain and digital payment platforms make cross-border payments easier, faster and cheaper. These technologies increase transparency, decrease the number of intermediaries and reduce fees.

Global business-to-business (B2B) payments are projected to reach $124 trillion by 2028, due primarily to cross-border transactions. Cross-border spending alone is expected to grow from nearly $195 trillion in 2024 to $320 trillion by 2032. Below, we'll explain how businesses use cross-border payments for B2B transactions, the challenges of these types of payments, market trends and how to handle regulations and taxes.

What's in this article?

• How do cross-border payments work?
  
• How do businesses use cross-border payments for B2B transactions?
  
• B2B cross-border payment challenges
  
• Growth trends in the B2B cross-border payment market
  
• Innovations in real-time B2B cross-border payments
  
• How cloud technology is advancing cross-border payments
  
• How to handle regulations and taxes for global transactions
  
• How Stripe Payments can help
  

How do cross-border payments work?

Cross-border payments are commonly conducted via payment methods such as electronic transfers, credit card transactions or international money orders. Several factors can shape cross-border payments, including the countries, regulations, currencies and payment method involved. Here are the stages of a typical cross-border payment:

• Initiation: First, a business initiates a payment to an international recipient through a bank transfer, electronic transfer or specialised payment platform.

• Currency conversion: Since the sender and recipient are in different countries, the sender's bank or payment provider must convert the funds from the sender's currency to the recipient's currency at the present exchange rate.

• Intermediary banks (if needed): The payment might pass through intermediary banks first. These banks facilitate the payment's movement to its intended destination.

• Clearing and settlement: The corresponding banking systems clear and settle the payment. They verify the payment details, ensure sufficient funds and transfer the funds to the recipient's bank account.

How do businesses use cross-border payments for B2B transactions?

Here are some common uses of cross-border payments for B2B transactions:

• Buying goods and services: Businesses often buy materials, components, or finished products from international suppliers. Then they settle the invoices with cross-border payments.

• Managing supply chains: Complex global supply chains pay for expenses such as shipping, logistics and customs duties with cross-border payments.

• Paying overseas employees or contractors: Businesses with remote employees or contractors in different countries pay salaries, wages and fees with cross-border payments.

• Investing in foreign markets: Companies looking to expand globally might invest in foreign businesses, real estate or other assets. They must transfer funds through cross-border payments to do so.

• Repatriating profits: Cross-border payments can transfer profits from international subsidiaries in foreign markets to businesses in their home countries.

• Settling financial transactions: Businesses might pay for financial transactions such as loan repayments, dividend payments or royalty fees with cross-border payments.

B2B cross-border payment challenges

While cross-border payments can be useful for B2B businesses, they can lead to operational and financial challenges.

Slow processing times cause payment delays

• International payments can take days to process because of factors such as varying bank hours, manual processing and required security and compliance checks. These types of delays can be harmful in time-sensitive industries such as manufacturing and perishable goods.
  

Navigating conflicting global regulations is costly

Each country has its own regulatory framework for financial transactions, including Anti-Money Laundering (AML) rules, counter-terrorism financing (CTF) standards and Know Your Customer (KYC) requirements. Compliance with these varied and sometimes conflicting regulations can be troublesome and costly. Failure to adhere can result in major legal penalties and reputational damage.

Hidden fees make costs unpredictable

The payment chain contains hidden fees, including correspondent bank charges, intermediary bank fees and currency conversion markups. This unpredictability complicates financial forecasting and reconciliation.

Multiple banks add extra fees

Most international payments involve multiple banks, including the sender's bank, intermediary banks and the recipient's bank. Each one might charge their own fees, which can reduce the total amount for the recipient. Involving multiple banks can also complicate payment tracking.

Currency fluctuations create foreign exchange (FX) risk

Currency fluctuations can drastically change the exchange rate during the payment process, causing unexpected losses. Sophisticated financial instruments and expertise can protect against FX risk, but they might not be available to all businesses.

Manual processes increase the risk of errors

Moving international payments through multiple systems increases the risk of operational errors such as misrouting and data entry mistakes. These errors can delay transactions and require substantial effort and cost to resolve.

Fraud risks are higher in cross-border transactions

Cross-border payments are particularly vulnerable to fraud due to the involvement of multiple parties and systems. Data breaches, phishing scams and unauthorised transactions can result in substantial financial losses and diminished customer trust.

Lack of real-time tracking

Because many traditional systems lack real-time visibility, businesses cannot easily track their cross-border payments. This uncertainty can disrupt supply chains, delay project timelines and strain relationships with suppliers and partners.

Technological incompatibilities

Differences in banks' technology platforms can create inefficiencies in the transaction process, requiring additional reconciliation and manual adjustments.

Limited access to banking in some regions

Recipients in some regions, especially in developing countries, might have limited access to banking services. They might have to use less secure, slower alternatives to receive international payments.

Outdated legacy systems are hard to integrate

Many businesses still pay with outdated legacy systems, which are often incompatible with modern cross-border payment solutions. Integrating cross-border payments with these systems can be costly, time-consuming, and prone to errors.

Growth trends in the B2B cross-border payment market

Several key trends are driving growth and transformation in the B2B cross-border payment market:

• Real-time payments: More countries are adopting real-time payment systems, which enable near-instantaneous cross-border transactions. As of early 2025, more than 70 countries had adopted some form of real-time payment system.

• Fintech solutions: Fintech companies are disrupting traditional banking models with innovative, user-friendly payment solutions. These companies use technologies such as blockchain, application programming interfaces (APIs), and AI to simplify processes, reduce costs and increase transparency.

• Transparency and compliance: Regulatory scrutiny of cross-border payments is increasing. To comply with regulations, businesses are adopting solutions that provide end-to-end visibility, automated compliance checks and strong reporting capabilities.

• Localised payment experiences: Businesses are seeking payment solutions that support the specific needs and preferences of different markets. This includes features such as payments in local currencies, support for local payment methods and compliance with local regulations.

• Digital currencies: Cryptocurrencies and central bank digital currencies (CBDCs) are emerging as potential alternative payment methods for cross-border payments. Stablecoins, a type of cryptocurrency with a stable value, are becoming a common way to transact across borders. As of 2025, global stablecoin transaction volume reached $27 trillion annually. They have faster settlement times, lower transaction fees and increased transparency compared to traditional methods.

• Market consolidation: Larger players are acquiring smaller fintechs and traditional banks are partnering with technology providers. This consolidation has resulted in more comprehensive and integrated payment solutions.

• Business-to-business-to-consumer (B2B2C) models: Payment providers are increasingly adopting B2B2C models, where they provide services to businesses that then provide these services to their customers. This model increases reach and scalability in the market.

These trends indicate a future where cross-border payments are faster, cheaper, more transparent and more accessible to businesses of all sizes.

Innovations in real-time B2B cross-border payments

Here are some key advancements in real-time B2B cross-border payments:

• Real-time payment networks: Real-time payment networks such as FedNow in the US and Faster Payments in the UK enable near-instantaneous cross-border transactions, reducing the delays associated with traditional correspondent banking.

• Blockchain and distributed ledger technology (DLT): Payment platforms such as RippleNet and IBM Blockchain World Wire use DLT to create secure, transparent and immutable payment ledgers. These ledgers make intermediaries unnecessary, reduce settlement times and lower transaction costs.

• API-driven platforms: APIs integrate different payment systems, banks and financial institutions, enabling faster and more effective data exchange, automated reconciliation and simplified payment flows. API-driven platforms such as Visa B2B Connect make real-time cross-border payments more visible and controllable.

• Artificial intelligence (AI) and machine learning (ML): AI and ML optimise routing, detect fraud, and manage risk in real time. These technologies can analyse vast amounts of data to identify patterns and anomalies, leading to faster decision-making and lower chances of errors or delays.

• Embedded finance: Embedded finance integrates financial services directly into business processes and platforms. Businesses can then initiate and receive cross-border payments within their existing workflows, making separate banking systems unnecessary and reducing friction in the payment process.

• Multicurrency wallets and accounts: Digital wallets and accounts that support multiple currencies simplify cross-border transactions. Businesses can hold and manage funds in different currencies, reducing the need for frequent conversions and minimising exposure to FX risk.

How cloud technology is advancing cross-border payments

Cloud technology advancements have made cross-border payments faster, more secure and more accessible. Here's how cloud technology is transforming cross-border payments.

• Faster global innovation: The cloud creates an environment that promotes innovation and collaboration between entities anywhere in the world. Fintech companies and traditional financial institutions can quickly develop and deploy new solutions on cloud platforms. Small and medium-sized enterprises (SMEs) looking to expand their markets internationally especially benefit from this access.

• Lower costs through scalable, on-demand infrastructure: Cloud platforms can scale significantly, allowing financial institutions and payment processors to handle increasing volumes of transactions without major infrastructure investment. This flexibility is especially useful for handling spikes in transaction volume during holidays or other peak times. Lighter maintenance and physical infrastructure costs also mean that fees are generally lower.

• Built-in security to protect transactions and data: Modern cloud platforms provide strong security and business continuity measures, including encryption, multifactor authentication and continuous monitoring. These measures help protect sensitive financial data from breaches and fraud, and allow businesses to recover data more quickly in the event of a disaster.

• Faster payments through real-time processing: Cloud technology reduces the settlement time of international transactions through high-speed internet connections and powerful processing capabilities. As a result, businesses can transfer funds across borders in a matter of minutes rather than days.

• Enhanced interoperability across borders and systems: Cloud-based systems integrate with various banking systems, payment networks and regulatory frameworks across different countries. This interoperability simplifies moving payments through multiple banks and jurisdictions, reducing errors and delays.

• Advanced analytics and support from AI: Cloud platforms often have advanced analytics and AI capabilities. These tools can detect fraud, predict transaction patterns, and provide insight into payment trends. Advanced analytics can also improve compliance with regulatory requirements by automating the detection of suspicious activities.

• Simplified regulatory compliance: Cloud service providers often have tools and frameworks to help financial institutions comply with international regulations. These include data residency solutions, compliance reporting and secure storage of transaction records.

• More transparent and user-friendly customer experience: With cloud technology, payment service providers can offer a more user-friendly experience. Features such as real-time payment tracking, instant notifications, and easy access to payment histories improve transparency and build trust with customers.

How to handle regulations and taxes for global transactions

Businesses that expand internationally can encounter new types of challenges, such as higher logistical costs, additional regulatory scrutiny and established local competition. Here are some tips for handling regulations and taxes in cross-border transactions.

Regulations

• Know your obligations: Each country has its own set of rules for financial transactions. These often include sanctions, data protection laws such as the EU's General Data Protection Regulation (GDPR), and AML regulations to prevent illegal activities such as money laundering or terrorist financing. Research the specific regulations that apply to your business and the countries involved.

• Partner with experts: Consult legal and financial professionals who specialise in international transactions. They can guide you through compliance issues and help you set up your business structure in a tax-efficient way.

• Use technology: Many modern payment platforms and software solutions have built-in compliance features. These tools can automatically examine transactions for potential issues, generate reports, and help you keep track of all the necessary documentation.

Taxes

• Understand tax treaties: Tax treaties are agreements between countries that determine how cross-border income is taxed. These treaties can offer benefits such as reduced tax rates or exemptions on certain types of income. Understand how these treaties apply to your business and transactions.

• Plan ahead: Work with a tax advisor or accountant who specialises in international tax to develop tactics that legally minimise your overall tax burden. For example, you might restructure your business, choose specific locations for your operations, or time transactions strategically.

• Keep detailed records: Keep detailed records of all income, expenses, assets and liabilities related to your international transactions. Having well-organised records will make it easier to file tax returns, respond to audits and avoid penalties.

• Transfer pricing: If your company operates in multiple countries, research transfer pricing rules. These rules govern how you price goods and services transferred between different parts of your company. They prevent companies from artificially shifting profits to low-tax jurisdictions.

How Stripe Payments can help

Stripe Payments provides a unified, global payments solution that helps any business – from scaling startups to global enterprises – accept payments online, in person and around the world.

Stripe Payments can help you:

• Optimise your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ 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: Build a unified commerce experience across online and in-person channels to personalise interactions, reward loyalty and grow revenue.
  
• Improve payments performance: Increase revenue with a range of customisable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorisation rates.
  
• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% uptime and industry-leading reliability.
  

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