Cross-border payments explained: Types of cross-border payments and who uses them


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  1. Introduction
  2. What are cross-border payments?
  3. Cross-border payment methods
  4. What are cross-border payments used for?
  5. Benefits and drawbacks of cross-border payments
  6. How to send cross-border payments
    1. 1. Choose a payment method
    2. 2. Check the exchange rate
    3. 3. Provide the recipient’s details
    4. 4. Verify the payment
    5. 5. Send the payment
    6. 6. Track the payment
  7. Cross-border payouts with Stripe

As the global marketplace continues to expand, more businesses are taking advantage of cross-border trade opportunities. In 2022, customers paid businesses around $2.8 trillion in cross-border payments, while over $150 trillion in B2B cross-border payments occurred that year. However, sending and receiving payments across borders can be a complex and challenging process, with various regulatory requirements, fees, and risks to navigate.

Despite these challenges, cross-border payments are important for businesses that want to expand into new markets, reach new customers, and diversify their revenue streams. And there are solutions to these challenges. With the right payment methods and strategies, businesses can reduce costs, improve cash flow, and accelerate growth.

Below, we’ll explore the various types of cross-border payments available, the benefits and downsides of cross-border payments for businesses, and the process for sending and receiving cross-border payments. Whether you are an established enterprise or a growing startup, understanding and planning for cross-border payments is important to stay competitive and keep your financial operations as efficient and effective as possible.

What's in this article?

  • What are cross-border payments?
  • Cross-border payment methods
  • What are cross-border payments used for?
  • Benefits and drawbacks of cross-border payments
  • How to send cross-border payments
  • Cross-border payouts with Stripe

What are cross-border payments?

Cross-border payments are financial transactions that occur between parties located in different countries. These payments involve the transfer of funds or assets from one country to another, typically through banks or other financial institutions. These transactions can be initiated by individuals or businesses, often involve currency conversions, and can be made using a variety of payment methods.

Cross-border payment methods

A payment is considered a cross-border payment when the payer and payee are located in different countries, regardless of the mechanism by which the payment occurs. For any given transaction, the ideal choice of payment method depends on various factors, such as the amount of money being transferred, the speed of the transaction, the currencies involved, and the fees associated with each method. Businesses and individuals who need to initiate a cross-border payment should consider the different methods of cross-border payments available and choose the most suitable method for their specific needs.

There are several common methods of cross-border payments, including:

  • Wire transfers: A wire transfer is an electronic transfer of funds between two different banks or financial institutions. In different parts of the world, wire transfers are transmitted using various wire networks that service different geographic areas. This type of payment is commonly used for large transactions – amount limits vary based on location and network – and can be sent in different currencies.

  • Credit card transactions: Credit cards are widely accepted around the world, and businesses can accept payments from customers in different currencies. Credit card transactions may be subject to currency conversion fees and other charges.

  • Electronic funds transfers (EFTs): Electronic funds transfers are commonly referred to as electronic bank transfers, e-cheques, or electronic payments. These transfers allow individuals and businesses to quickly and securely send and receive money electronically. This type of payment is typically faster and more convenient than other forms of cross-border payments.

  • International money orders: International money orders are a paper-based payment method that can be sent through the mail or transmitted electronically using a third-party provider. They can be purchased at banks and other financial institutions and are typically used for smaller transaction amounts.

  • Online payments platforms: Online payment platforms allow individuals and businesses to send and receive money internationally using their mobile devices or computers. These platforms often offer competitive exchange rates and low fees. Many credit card networks also offer online cross-border payments.

  • Cryptocurrencies: Cryptocurrencies such as Bitcoin and Ethereum are decentralised digital currencies that can be used to make cross-border payments. One study showed 75% of retailers plan to accept cryptocurrency as a payment method by 2024. These payments can be processed quickly and securely, but crypto comes with some drawbacks due to volatility in the cryptocurrency market.

What are cross-border payments used for?

Cross-border payments are an important component of the global economy, enabling the flow of money between countries for a wide range of purposes. In both professional and personal contexts, cross-border payments are used for a variety of purposes, including:

  • International trade
    Cross-border payments are important for businesses that import or export goods and services between different countries. They allow businesses to pay for goods and services from suppliers and receive payments from customers in other countries.

  • Travel and tourism
    Cross-border payments enable travellers to make purchases and pay for services such as flights, hotels, and tours when travelling internationally.

  • Remittances
    Cross-border payments allow individuals to send money to family members and friends living in other countries, which is important for supporting families and communities in developing countries.

  • Investment
    Cross-border payments enable investors to purchase assets such as stocks, bonds, and real estate in other countries, and receive income and profits from those investments.

  • International charitable donations
    Cross-border payments allow individuals and organisations to make donations to charities and nonprofit organisations operating in other countries, supporting a vast range of causes and initiatives around the world.

Benefits and drawbacks of cross-border payments

Cross-border payments can create significant opportunities for businesses to expand into new markets and grow their revenue – all with more ease, efficiency, and speed. However, they also come with various risks and challenges that must be carefully managed to ensure success.

Here are some of the main advantages and disadvantages:


  • Access to global markets: Cross-border payments allow businesses to expand into international markets and reach new customers, suppliers, and partners.
  • Increased revenue and growth opportunities: By selling goods and services internationally, businesses can increase their revenue and tap into new growth opportunities.
  • Diversification: Cross-border payments enable businesses to diversify their customer base, supplier base, and investment portfolio, reducing their reliance on domestic markets.
  • Cost savings: Some cross-border payment methods can be more cost-effective than others, allowing businesses to save money on transaction fees, currency exchange rates, and other costs associated with international trade.
  • Flexibility: Cross-border payments offer businesses flexibility in terms of payment methods, allowing them to choose the most convenient and cost-effective method for their specific needs.


  • Regulatory requirements: Cross-border payments are subject to various regulatory requirements and compliance obligations, which can be complex and time-consuming to navigate.
  • Currency risk: Cross-border payments are subject to fluctuations in exchange rates, which can impact the value of transactions and affect businesses’ cash flow.
  • Fees and charges: Some cross-border payment methods can be expensive, and fees and charges vary depending on the country and payment method.
  • Fraud and security risks: Cross-border payments can be vulnerable to fraud and security risks, such as cyber attacks, identity theft, and payment scams.
  • Operational complexity: Cross-border payments can be more complex and time-consuming to process than domestic payments, requiring businesses to have the necessary resources and expertise to manage them effectively.

How to send cross-border payments

Sending cross-border payments requires careful planning and attention to detail. The process will run more smoothly with a payment provider that is familiar with your business, your financial accounts, and the international parties that you frequently transact with. You should also choose the right payment method for your needs and carefully verify all of the details to ensure that your payment is processed quickly, accurately, and securely.

The process of sending cross-border payments might vary, depending on where you’re sending funds to and from and which method of transfer you opt for, but here are the basic steps:

1. Choose a payment method

There are multiple ways that you can send cross-border payments, including wire transfers, credit card transactions, electronic funds transfers, international money orders, online payments platforms, and cryptocurrencies. Each method has its own advantages and disadvantages, so choose the one that best suits your needs.

2. Check the exchange rate

If you are sending a cross-border payment in a different currency, you will need to check the exchange rate to ensure that you understand both what the transfer will cost you and what the amount received on the other end will be. Exchange rates can vary, depending on the country and payment method.

3. Provide the recipient’s details

To send a cross-border payment, you’ll need to provide the recipient’s details, including their name, address, bank account number, and routing number. You may also need to provide additional information, such as the purpose of the payment and any relevant reference numbers. Different financial institutions and transfer networks might require different information to process the transfer.

4. Verify the payment

Before sending a cross-border payment, you should double-check all of the details to ensure that they are accurate. This will help to avoid any delays or errors in the payment process – which is especially important for irreversible payment methods, such as money orders.

5. Send the payment

Once you have verified the payment, you can send it using your chosen payment method. The time it takes for the payment to be received can vary depending on the method used and the countries involved.

6. Track the payment

It’s a good idea to track your cross-border payment to ensure that it is received by the recipient. This can be done using the tracking number or reference number provided by your payment provider.

Cross-border payouts with Stripe

Stripe’s cross-border payouts service is designed to simplify the process of sending payments to individuals or businesses located in different countries. By using Stripe’s platform, businesses can manage multiple currencies, payment methods, and compliance requirements, all from a single integration. Stripe’s service can also help to reduce costs and improve the speed and efficiency of cross-border payments.

Cross-border payouts enable Stripe users to pay sellers, freelancers, content creators, and service providers in their local currencies. Check here for a full list of payout currencies available with Stripe. Businesses using Stripe can transfer funds to connected accounts in other countries with their existing platform account and charge configuration. For a full list of supported countries, learn more here.

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