Despite fast growth in the cross-border payments market, confusion around the process persists. Say your consultation business hires design contractors overseas: do you pay in USD or local currency? Or maybe you’re onboarding retailers from other countries to your marketplace, and wondering how that affects your finance team. B2B cross-border payments keep growing, so this guide breaks down how they work and how to pay vendors, contractors and partners anywhere in the world.
TLDR:
- The global cross-border payments market reached $208 trillion in 2025, with B2B-driven wholesale flows making up the bulk of that volume, yet high fees and slow settlement remain the biggest gaps.
- Wire transfers can cost up to $50 per payment, and legacy methods like checks can take weeks to settle internationally.
- Your payment method choice directly affects cash flow; the currency decision alone creates downstream reconciliation risk.
- Fintech tools including APIs, virtual accounts, and real-time visibility close the transparency gap traditional banking leaves open.
- Routable handles cross-border disbursements with full visibility into currency conversion rates and fees across payment methods.
What Are Cross-Border Payments?
Cross-border payments are financial transactions that cross geographical borders and jurisdictions, covering payments to freelancers and contractors, taxes owed to foreign governments, or remittances for migrant workers. The overall cross-border payments market (covering B2B, consumer, and remittance flows) was valued at over $208 trillion USD in 2025, with B2B payments alone projected to reach $42.7 trillion USD this year.
Unlike domestic payments with a common currency, language and regulations, cross-border transactions involve many moving parts that traditionally slow settlement and complicate reconciliation. Each country enforces its own regulations to confirm transactions are secure and legal, and your business may also hit language barriers, time zone gaps and unfamiliar holidays with foreign banks. Then there’s the currency question: paying in USD or local currency can meaningfully affect cash flow.
Three Trends Changing the Cross-Border Payments Market
Legacy payment methods like cash, check and wire transfer slow cross-border payments: domestic payments settle in three to five days, but cross-border payments can take weeks. As global business pushes further into international markets, the way cross-border transactions move has been evolving, and businesses are feeling the benefit: the 2025 AFP Digital Payments Survey found that 87% of organizations now engage in cross-border payments, up 9 percentage points from 2022.
Here’s what’s driving changes in the cross-border payments market:
1. Faster Payment Expectations
Money now moves from person to person with a few taps, through peer-to-peer (P2P) and customer-to-business (C2B) apps like Venmo, CashApp and Apple Pay. B2B payments feel slow by comparison: even a 24-hour window can strain cash flow for small businesses that depend on fast invoice settlement.
The same people paying friends back with a quick tap are also freelancers and contractors who want faster turnaround on their own payments. Traditional B2B methods like paper checks are losing ground, with B2B check usage in North America down 7 percentage points in 2025 (from 33% to 26% of B2B payments), per AFP’s 2025 Digital Payments Survey, as businesses shift to online payment solutions like PayPal.
2. Online and Mobile Accessibility
Digital payment methods require internet access and a mobile banking-capable device. Recent studies show that over two-thirds of the world’s population is both connected to the internet and owns a mobile device. Digital payment methods are faster and with more of the world connected, digital adoption is more widely used. That growth has been most pronounced in developing economies like South Africa, Peru and Malaysia.
3. Growth of Digital Payments
Digital payment usage keeps climbing: in-app digital payment usage in the U.S. reached 60% in 2024, up 8 percentage points since 2019, paving the way for faster, more secure payments. This includes the growth of Real-time Payments (RTP) options, which let businesses and consumers pay instantly. The Clearing House’s RTP data shows 142 million transactions totaling $576 billion in the second quarter of 2026 alone.
Types of Cross-Border Payments
The Cross-Border Payment Process Flow (and How Cross-Border Payments Work)
The cross-border payment process flow isn’t that different from making a domestic payment, but there are some unique details along the way to consider. Here’s how cross-border payments work.
Step 1: Identify
Accounts payable (AP) tracks incoming invoices and flags when a payment is coming due for an overseas vendor. Tax documentation should be collected before a vendor is deemed payable, since those documents hold the identifying details needed to complete payment in later steps.
Related reading: Tax documents W-8BEN-E Form and Form 1042-S
Step 2: Route
Once approvals clear, the payment moves forward, but routing an international payment requires specific vendor details. A check or prepaid card only needs a name and mailing address. A wire transfer or international ACH needs a bank account number, an international routing number, and the vendor’s International Bank Account Number (IBAN).
Suggested reading: What’s an IBAN?
Step 3: Approve or Decline
Your financial institution processes the transfer, and a communication error with the foreign bank will stop or decline the payment. Incorrect banking information is a common cause, and more than two institutions may be involved depending on the vendor’s location, which can slow things down further.
Step 4: Settle
Once approved, the foreign financial institution settles the final transfer to your vendor. Settlement time depends on local bank regulations, and fees may apply here depending on currency conversion and payment method.
Step 5: Track
Once a cross-border payment is processed, your finance team still needs to confirm it was approved and settled. Two-way communication between payer and payee institutions isn’t always available, so a payer may learn a payment was declined while the payee never gets notified. Delays or hidden fees can send both teams retracing the process to resolve the issue.
Challenges of Cross-Border Payments
Cross-border payments bring their own set of challenges. Here are the top four identified by the Financial Stability Board (FSB).
1. High fees
Banks charge fees for risk mitigation, currency conversion and payment methods. Wire transfers initiated in the U.S. can run upward to $50 per payment, which adds up fast across a large vendor base.
Suggested reading: Learn how to pay international contractors
2. Slow speed
Digital payment options are making B2B cross-border payments faster, but legacy methods still slow things down. Checks leave vendors waiting on the mail plus settlement time, and bank transfers can stretch for days depending on how many institutions a payment passes through.
3. Limited access
Not all borders and jurisdictions have full access to cross-border payment channels. A local currency may not be recognized, or local banks may not participate in SWIFT, leaving SMBs with limited options.
4. Lack of transparency
Traditional cross-border payments also lack transparency into fees, tracking and currency conversion rates from the start. This ties into the other three challenges: finance teams often can’t see fees or transfer times upfront, making delays harder to track down.
How Fintech Is Improving Cross-Border Payments
Cross-border transactions compound the number of variables involved in a payment cycle, requiring AP teams to be knowledgeable of international regulations and restrictions as well as currencies and overseas banking schedules. Fintech is changing the way businesses approach cross-border payments, implementing advanced technologies to enhance the experience on both ends of payments.
APIs
Application Programming Interface (API) is an intermediary between two software components. Logging into an online banking interface is an example of an API. The API is the intermediary that connects your computer or phone to the bank’s server so that you can access your account information. Historically, the only way to access this information was to physically go to a bank location and request these details from a teller or ATM.
The applications of APIs are seemingly infinite, and growth shows no sign of slowing: 427% growth in open banking APIs is projected from 137 billion calls in 2025. The more that APIs are implemented, the more versatile the financial ecosystem can become. APIs eliminate the need for finance teams to memorize international policies or track currency conversion rates, their fintech software is already doing it for them faster and with more accuracy.
Enhanced visibility
As mentioned earlier, one of the biggest hurdles that businesses need to overcome is two-way visibility in the cross-border payment cycle. Payment method fees, transfer fees, currency conversion and settlement lead times: each of these pieces in a payment puzzle need to be communicated to both parties to avoid friction in the vendor-to-buyer relationship.
Fintech aids in this transfer of information by acting as the intermediary between financial institutions, communicating at each end of the infrastructure and funneling the information back to the buyer and sender in real-time. This enhances confidence in the payment cycle while also eliminating guesswork and the need to chase down information from a foreign bank.
Virtual accounts
Instead of going to a bank to open an account, businesses can now open virtual accounts, or bank accounts that can be opened online without ever having to step into a building. The ability to open an account remotely improves accessibility to underserved markets and industries. This eliminates the need for businesses to manage local bank accounts in order to manage and monitor currency conversion.
User experience
A recent study by EY found that 51% of Gen Z and 49% of millennials favor a fintech company as their most trusted financial brand. Fintech adopts a digitally native experience to business needs, with a mobile interface that can be accessed and used for myriad purposes from the comfort of a living room couch, the convenience of a bus stop bench or the versatility of, say, a gondola in Venice. As long as the user has access to the internet, or data on their mobile device, they can send and receive payments from anywhere.
Sending Cross-Border Payments With Routable
Looking for cross-border payments companies to help pay your international vendors and contractors? Routable offers the simplest way to send cross-border payments while solving common challenges that pop up for businesses throughout the process.
Choose convenient payment methods and processing speeds, rely on an easy-to-scale API and set up preferred controls in AP workflows, all while providing a user-friendly vendor experience. Plus, you’ll have complete transparency into currency conversion rates and fees so you know how your money is moving internationally.
Learn more about cross-border payments with Routable.
FAQs
What’s the fastest way to pay international contractors without wire transfer fees eating into every disbursement?
International ACH (Global ACH) is typically the lowest-cost option, settling in two to five business days with fees well below the $50 wire transfer ceiling. For payees with limited ACH coverage, local rails are the next best fit, so confirm which rails your provider supports per destination country.
How do cross-border payment fees compound at scale, and when does that become a cash flow problem?
Wire transfer fees of up to $50 per payment add up fast: 500 monthly payouts means $25,000 in transaction costs alone, before currency conversion and intermediary bank charges. Add settlement delays, like payees waiting one to three weeks for check-based payments, and accounts payable float grows with your payee network.
Can I send cross-border payments to 220+ countries through Routable without managing separate local bank accounts?
Yes. Routable supports disbursements to 220+ countries and territories across 140+ currencies through a single platform, with no local bank accounts required. Currency conversion rates and fees are visible before a disbursement executes, not after.
