What Are Cross-Border Digital Payments?
Written by Max Crawford
Every day, $532 billion moves between countries—payments for goods, wages, and remittances that keep the global economy running. Yet the infrastructure handling these transactions is decades old, expensive, and slow. A payment from New York to Manila can cost 6.5% in fees and take three to five days to arrive. For businesses and families depending on that money, those delays add up.
Cross-border digital payments are changing this. From stablecoins settling in seconds to APIs that bypass legacy banking rails, new infrastructure is reshaping how money moves internationally. Here’s what you need to know.
What Are Cross-Border Payments?
Cross-border payments are financial transactions where the payer and recipient are in different countries. They include remittances (money sent by workers to family members abroad, a market the World Bank estimates at over $650 billion annually), B2B payments (invoices, supplier payments, and trade settlement between businesses), cross-border payroll (wages paid to employees and contractors in different jurisdictions), and e-commerce (consumer purchases from international merchants).
“Digital” cross-border payments refer to transactions initiated and processed electronically—through apps, APIs, or online platforms—rather than through cash or paper-based methods like wire transfers at a bank branch.
How Do Traditional Cross-Border Payments Work?
Traditional cross-border payments rely on correspondent banking, a system where banks maintain relationships and accounts with each other across borders. When you send money internationally, your bank typically doesn’t have a direct connection to the recipient’s bank. Instead, the payment travels through a chain of intermediary banks—each with bilateral agreements, each charging fees, each adding processing time.
Here’s how a typical payment flows:
You initiate the payment at Bank A in the US
Bank A sends a message via SWIFT to Bank B (a correspondent bank)
Bank B may route the payment to Bank C (another correspondent)
Bank C finally credits the recipient’s bank in the Philippines
The recipient’s bank credits their account
Each hop in this chain means another fee, another compliance check, and another potential delay. The funds may sit in intermediary accounts overnight or over weekends, with each bank collecting interest on the float.
The SWIFT network (Society for Worldwide Interbank Financial Telecommunication) handles the messaging for these transactions, connecting over 11,000 financial institutions. But SWIFT is a messaging system, not a settlement system—the actual money moves through correspondent accounts, which is where the delays occur.
Why Are Traditional Cross-Border Payments So Expensive and Slow?
The G20 identified four persistent challenges with cross-border payments that it’s working to address by 2027:
| Challenges | The Problem |
|---|---|
High costs | The global average remittance cost is 6.49%. Banks charge an average of 13.64%—nearly three times more than digital-only providers. |
Slow speed | Payments can take 1-5 business days. No weekend or holiday processing. Funds sit idle in intermediary accounts. |
Limited transparency | Senders often don’t know the full cost upfront or where their payment is in the chain. Hidden FX margins add to the expense. |
Access gaps | Many corridors have limited competition. Sub-Saharan Africa pays an average of 8.45% per transaction. |
These issues are structural. The correspondent banking network is shrinking and becoming more concentrated, which reduces competition and keeps costs high. Each intermediary has little incentive to speed up payments—holding funds overnight in a high-interest environment generates revenue.
The Hidden Cost of Delays
For a business paying international suppliers, a 3-day payment delay means cash flow uncertainty, strained supplier relationships, FX exposure during settlement, and manual reconciliation when payments finally arrive. For a worker sending money home, a $200 remittance at 6.5% fees means $13 that never reaches their family. Globally, reducing remittance costs by just 5 percentage points could save migrants $16 billion annually.
What Are the Main Types of Cross-Border Digital Payments?
Remittances
Remittances—money sent by migrants to family in their home countries—represent one of the largest cross-border payment flows, exceeding $650 billion annually with major corridors including US-to-Mexico, Gulf states-to-India, and Europe-to-Africa.
Digital remittance providers like Wise, Remitly, and Revolut have driven costs down significantly. Digital-only money transfer operators now average 3.87% fees compared to 13.64% for banks, but even these improved rates remain above the UN’s target of 3%.
B2B Cross-Border Payments
Business-to-business payments represent the largest segment by value—$31.6 trillion in 2024, projected to reach $50 trillion by 2032. These transactions include trade payments to international suppliers and manufacturers, treasury management between subsidiaries, and cross-border investment flows.
B2B payments face unique challenges because larger transaction sizes amplify FX exposure, complex compliance requirements (sanctions screening, KYC/AML) slow processing, and integration with enterprise financial systems adds technical friction.
Cross-Border Payroll
With remote work now standard, companies routinely pay employees across 25+ countries. Managing global payroll means navigating local tax withholding requirements, currency conversion timing, compliance with employment laws in each jurisdiction, and varying payment method preferences from bank transfers to mobile money.
The complexity compounds quickly: manual processes and legacy systems create errors, payment file formats vary by country, and hidden intermediary fees eat into worker compensation.
E-Commerce
Global e-commerce increasingly involves cross-border transactions, but regardless of where the purchase originates, consumers expect to pay in their local currency with familiar payment methods. To meet those UX expectations, merchants need to accept payments globally while managing FX risk and settlement timing.
How Are Crypto and Stablecoins Changing Cross-Border Payments?
Blockchain technology offers a fundamentally different architecture for moving money internationally. Instead of hopping through correspondent banks, value moves directly on a shared ledger—settling in seconds rather than days.
Stablecoins make this practical for real-world payments. These are digital currencies pegged to fiat assets like the US dollar, combining blockchain’s speed and efficiency with price stability. The stablecoin market now exceeds $307 billion, with Ethereum holding $161 billion, Tron dominating emerging market remittances at $84 billion, and Solana processing high-throughput payments at $14 billion. For a deeper look at how stablecoins differ across networks, see our breakdown of the stablecoin landscape across chains.
Why Stablecoins Work for Cross-Border Payments
| Traditional rails | Stablecoin rails |
|---|---|
Business hours only (M-F, 9-5) | 24/7/365 operation |
1-5 day settlement | Settlement in seconds to minutes |
Multiple intermediaries taking fees | Direct peer-to-peer transfer |
Opaque pricing with hidden FX margins | Transparent on-chain fees |
Cut-off times and batch processing | Real-time, continuous processing |
Research estimates that on-chain foreign exchange transactions can reduce remittance costs by as much as 80% compared to traditional rails.
Real-World Adoption
Major financial infrastructure providers are building on stablecoin rails to meet growing demand:
Visa launched USDC settlement in the US, processing over $3.5 billion in annualized stablecoin volume over the Solana blockchain.
Stripe acquired Bridge, a stablecoin infrastructure platform, to power global money movement with instant settlement.
PayPal launched its own stablecoin (PYUSD) for payments and transfers.
This isn’t experimental anymore. In 2022, fiat-backed stablecoins processed nearly $7 trillion in volume—exceeding Mastercard and approaching PayPal’s total.
Beyond Stablecoins: Programmable Payments
Blockchain enables more than faster transfers. Smart contracts make payments programmable: conditional payments release funds when conditions are met (delivery confirmed, milestone completed), streaming payments compensate workers by the second rather than bi-weekly, automated compliance embeds KYC/AML checks directly in the payment flow, and multi-signature controls require multiple approvals for large transactions.
This programmability is particularly valuable for B2B use cases where payments often depend on complex conditions.
What Are the Benefits of Blockchain-Based Cross-Border Payments?
Speed
Blockchain transactions settle in seconds to minutes, not days. There’s no waiting for banking hours, no weekend delays, no cut-off times. For businesses, this means better cash flow visibility and faster reconciliation.
Cost Reduction
By eliminating intermediaries, blockchain-based payments dramatically reduce fees. A USDC transfer costs a fraction of a cent on efficient chains, compared to $25-50 for international wires plus FX spreads. For high-volume payment operations, gasless infrastructure can further reduce costs by sponsoring transaction fees on behalf of users.
Transparency
Every transaction on a public blockchain is visible and auditable. Senders know exactly what fee they’re paying and can track the transaction in real-time—no more “your payment is being processed” black boxes.
Access
Anyone with an internet connection can send or receive stablecoins. This matters for the 1.4 billion unbanked adults globally—they don’t need a bank account, just a smartphone.
Programmability
Payments can carry logic. A smart contract can automatically convert currencies, split payments between parties, or release funds based on external data (like shipping confirmation), which reduces manual intervention and errors.
What Does It Take to Build Cross-Border Payment Infrastructure?
Building on blockchain requires reliable infrastructure. Whether you’re a fintech adding stablecoin payouts, a remittance company reducing costs, or an enterprise managing global treasury, the core requirements are similar.
Blockchain connectivity means reliable access to read and write data on the chains where stablecoins operate—Ethereum, Solana, Polygon, and others. This requires RPC endpoints that don’t go down when you need them.
Transaction handling involves submitting transactions reliably, managing gas costs, and handling retries when the network is congested. For high-volume payment flows, this becomes operationally complex.
Data and indexing covers tracking payment status, monitoring wallet balances, and building transaction history for reconciliation and compliance. Raw blockchain data needs to be indexed and queryable.
Multi-chain support is essential because stablecoins exist on multiple networks. Your infrastructure needs to support the chains where your users and counterparties operate.
Alchemy provides the blockchain infrastructure layer that payment companies build on—RPC access, transaction APIs, and indexed data across 100+ chains. We power $150B+ in transactions and serve teams building everything from consumer remittance apps to enterprise treasury systems.
If you’re building cross-border payment infrastructure, start with a free account or talk to our team about enterprise requirements.
The Future of Cross-Border Payments
The $194 trillion cross-border payments market is being rebuilt. Stablecoins have moved from experiment to infrastructure, with major financial institutions—Visa, Stripe, PayPal—now building on crypto rails.
The trajectory is clear: payments will become faster (instant), cheaper (near-zero marginal cost), more transparent (on-chain audit trails), and more programmable (smart contract logic). The correspondent banking model that has dominated for centuries is being augmented—and in some corridors, replaced—by blockchain infrastructure.
For developers and companies building in this space, the opportunity is significant. The teams that build great user experiences on these new rails will capture value as the market shifts.
FAQs
What is the difference between cross-border payments and international wire transfers?
International wire transfers are one type of cross-border payment, specifically bank-to-bank transfers using networks like SWIFT. Cross-border payments is the broader category that includes wire transfers, card payments, remittances, and newer methods like stablecoin transfers.
How long do traditional cross-border payments take?
Traditional cross-border payments typically take 1-5 business days, depending on the corridor, currencies involved, and number of intermediary banks. Payments initiated on weekends or holidays may take longer since correspondent banks don’t process outside business hours.
How much do cross-border payments cost?
Costs vary significantly. The global average for remittances is 6.49%, with banks charging an average of 13.64% and digital providers averaging 3.87%. B2B payments typically involve flat fees ($25-50 for wires) plus FX spreads of 1-3%. Stablecoin transfers can cost fractions of a cent plus any on/off-ramp fees.
Are stablecoin payments legal for cross-border transfers?
Stablecoin legality varies by jurisdiction. In most developed markets, using stablecoins for payments is legal, though regulations around licensing, reporting, and consumer protection continue to evolve. Major stablecoin issuers like Circle (USDC) operate under money transmission licenses and maintain regulatory compliance. Recent frameworks like MiCA in the EU and the GENIUS Act in the US are providing clearer guidelines.
What chains are most used for cross-border stablecoin payments?
Ethereum remains the largest by total stablecoin market cap ($161B), but high-throughput chains like Solana, Tron, and Polygon see significant payment volume due to lower fees and faster confirmation times. Visa’s stablecoin settlement, for example, runs on Solana.
How do businesses handle compliance with crypto cross-border payments?
Compliance requirements (KYC, AML, sanctions screening) apply regardless of payment rails. Companies building on blockchain typically partner with compliance providers, implement wallet screening, and maintain the same reporting obligations as traditional money transmitters. The transparency of blockchain actually helps—transactions are auditable by default.
What’s the difference between CBDCs and stablecoins for cross-border payments?
CBDCs (Central Bank Digital Currencies) are digital currencies issued by central banks, while stablecoins are issued by private companies. Both can enable faster cross-border payments, but CBDCs carry sovereign backing while stablecoins rely on reserve management by their issuers. Many central banks are exploring CBDC interoperability for cross-border use, though most projects remain in pilot stages.
Can I use stablecoins for payroll?
Yes. Companies like Deel and Remote now offer stablecoin payroll options for international contractors. Workers can receive USDC and either hold it, convert to local currency via exchanges, or spend directly where crypto is accepted. This is particularly valuable in high-inflation countries or corridors with expensive traditional remittance options.
Building cross-border payment infrastructure? Alchemy provides the blockchain connectivity, transaction APIs, and indexed data you need across 100+ chains. Get started free or contact our enterprise team.
