A single cross-border payment can involve multiple banks, currency conversion, compliance screenings, and routing decisions—all of which shape how fast the money lands and how much it costs to send. Despite the complexity, the global cross-border payments market approached about $1 quadrillion in volume in 2024.

Below, we explain how international payments move, why cross-border payments behave differently from domestic ones, and how businesses can choose their own international payment solutions.

What's in this article?

• What defines international payments?
  
• How do international payment flows and settlement work?
  
• What technologies and networks enable more efficient international payments?
  
• How do international payments affect cost, speed, and performance?
  
• What challenges complicate cross-border payments for businesses?
  
• How can companies evaluate and select an international payment solution?
  
• How Stripe Payments can help
  

What defines international payments?

An international payment is any transfer of money where the sender and receiver are in different countries. Instead of moving value inside one shared banking system, the payment has to jump from one national system to another, each with its own rules, currencies, and clearing practices.

How do international payment flows and settlement work?

The entire system for international payments runs on coordination between banks, payment networks, and currency conversion services. Banks often can’t directly access foreign payment networks, so they hold funds in nostro accounts at partner banks abroad. This lets the sending bank instruct its partner to pay the recipient locally while it debits the sender’s account at home. When a direct partnership doesn’t exist, payments route through intermediary banks that connect both sides.

A US dollar-to-euro payment might clear through one or two banks, while a Brazilian real-Thai baht payment might pass through several. SWIFT transmits standardised instructions that tell each bank in the chain what to do. Its network, used by more than 11,500 institutions, creates consistency in how payment details travel, even if the underlying systems differ.

Final settlement typically happens through central bank systems or high-value clearing networks. When currency conversion is involved, the foreign exchange (FX) trade might settle through platforms such as Continuous Linked Settlement (CLS), which coordinates both sides of the exchange to reduce settlement risk.

What technologies and networks enable more efficient international payments?

While international payments are still largely powered by legacy systems built decades ago, certain technologies have emerged to make these payments faster, cheaper, and easier to track.

Here's an overview:

• SWIFT Global Payment Innovation (gpi): gpi adds real-time status updates, time stamps, and confirmations, so banks can see where a payment is in the chain instead of tracing it manually.

• Card networks: Card networks handle authorisation, clearing, and settlement for international card transactions, creating a reliable path for global online checkout. They move payment information through a tightly managed network that’s optimised for speed and fraud controls.

• Regional systems that simplify cross-border movement: Frameworks such as Single Euro Payments Area (SEPA) in Europe treat euro-denominated payments across member countries almost like domestic transfers. Shared rules and clearing infrastructure enable faster, cheaper settlement within the region.

• Local-network stitching: Some modern providers use domestic clearing systems in each country to replace one cross-border transfer with two local ones. This approach avoids multibank correspondent chains and can settle payouts within minutes.

• Cross-border links between real-time payment systems: National instant-payment systems are beginning to connect directly, which lets money move across borders as fast as it moves within them. These links shrink settlement windows and reduce reliance on slow systems based on batching transactions.

• Infrastructure for safer FX settlement: Platforms such as CLS allow banks to settle both sides of major currency trades simultaneously. This lowers settlement risk and helps payments move more predictably across currencies.

• Digital currency and ledger experiments: Central banks and payment networks are testing shared ledgers and central bank digital currency (CBDC) systems with multiple currencies that settle cross-border transfers in real time.

How do international payments affect cost, speed, and performance?

International payments often increase what businesses pay, how long money is in transit, and how much effort teams spend keeping everything reconciled and compliant.

Here's why:

• Higher and less predictable costs: A single payment might pass through several intermediaries. And converting one currency to another usually involves a spread added to the market rate. The sender can’t always predict the final amount the recipient will actually receive.

• Delays tied to compliance checks: Every bank that touches a payment runs its own regulatory screenings. Even routine transactions can trigger false positives that require manual review, which delays payouts and pulls finance teams into follow-up tasks.

• More administrative overhead: Cross-border payments generate more exceptions, such as missing data, formatting mismatches, partial payments, and returns. Teams spend time tracing delays, confirming receipt, and reconciling amounts after unexpected fees are deducted.

• Treasury from multicurrency flows: Businesses receiving or paying in several currencies have to manage foreign exchange (FX) exposure, decide when to convert funds, and track balances across currencies. Slow settlement times increase the risk that exchange rates shift before a payment clears.

• Cash flow uncertainty: When international payments take days rather than hours, businesses might need to send funds earlier than they’d like or build larger buffers into their working capital. Slow inbound payments can also create timing gaps between revenue recognition and actual access to cash.

What challenges complicate cross-border payments for businesses?

The core issues with international payments come from structural gaps and fragmentation among countries’ financial systems. Those gaps shape the delays, fees, and inconsistencies businesses tend to encounter.

Here are some of the most frequent hurdles:

• Disconnected infrastructure: Each country runs its own clearing systems, timelines, and data rules. When a payment moves between systems with different formats or character limits, information can be clipped or reshaped in ways that slow processing or prompt manual review.

• Uneven data standards: Even with the introduction of ISO 20022, many institutions still rely on older formats. Missing or incompatible fields can cause payments to pause midroute while banks reconcile the discrepancies.

• Compliance checks at every step: Sanctions screening, Anti-Money Laundering (AML) controls, and local regulatory requirements are applied repeatedly as a payment moves through each bank. These checks produce delays and false positives over which finance teams have little control.

• Limited operating hours: Many national systems don’t run at all hours, and their business hours rarely align across time zones. Payments can sit idle overnight or through weekends, which extends the timeline even when nothing is wrong.

• Liquidity constraints: Banks often need to prefund accounts in foreign currencies to move payments quickly. When liquidity is thin in a corridor, routing options narrow and settlement slows.

How can companies evaluate and select an international payment solution?

The right provider should make international money movement feel predictable, fast, and operationally manageable.

Here's what to look for:

• Coverage that matches your footprint: Look at which countries, currencies, and local payment methods the provider supports. Ask how quickly funds typically arrive in your key corridors and how often payments require manual intervention. Providers with access to local payment networks or direct integrations in multiple countries tend to deliver more consistent timelines.

• Transparent pricing and FX: Compare fees, exchange-rate markups, and the provider’s approach to currency conversion.

• Simplicity, integration, and oversight: If your team handles a lot of payouts, features such as batch processing, automated reconciliation, and built-in reporting can save hours every week. Likewise, a solid provider handles the sanctions screening, AML checks, and data security.

• Scalability as you expand: Make sure the platform can handle increasing volume, new markets, and additional currencies without having to rebuild.

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% historical uptime and industry-leading reliability.

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