How a cross-border payment moves
Money does not travel: account balances change. In correspondent banking, the sender's bank instructs a bank where it holds an account in the destination currency, that bank pays the recipient's bank, and messages on the SWIFT network tell each one what to do. Each bank in the chain may take a fee, run its own compliance checks and add time.
Other routes avoid the chain. A regional scheme such as SEPA treats payments between its countries like domestic ones, card networks clear between issuers and acquirers worldwide, and some providers hold accounts in many countries and pay out locally on each side. Stablecoins are a newer route, settling on a blockchain and converting to local money at either end.
The EU's rule on cross-border charges
Regulation (EU) 2021/1230 defines a cross-border payment as one where the two payment service providers are in different member states. A provider's charges for a cross-border payment in euro must be the same as its charges for a corresponding national payment of the same value in the national currency of its member state. The rule does not cover currency conversion charges.
What a cross-border product has to handle
- Currency conversion, with its cost shown before the payer confirms
- Sanctions screening and anti-money laundering checks on both parties
- Payer and payee details that travel with the payment
- Cut-off times, holidays and settlement dates in two countries
- Reconciling what was sent with what arrived after fees
Where a cross-border payment shows up in a platform
Modules that do the work
- PayoutsMoney out to bank accounts, cards and wallets, on the rail that fits each payment.
- FXCurrency conversion with live rates, your margins and the liquidity provider you choose.
- KYC / AMLIdentity checks, screening and ongoing monitoring, with the verification provider you choose.
- LedgerThe double-entry book of record behind every balance, fee and transfer.
Platforms that need it
Guides that go deeper
- Stablecoin B2B payments: how paying suppliers abroad worksHow a stablecoin payment to a supplier abroad moves, from euros in to local currency out, what changes against correspondent banking, and the rules in the EU, the UK and the UAE.
- Licensing a remittance business in the UAEHow the Central Bank of the UAE licenses money transfer: the Exchange Business Regulation, the app-only Category IV licence, capital and guarantees, AML duties and partners.
Where it is written
The laws and standards this page's facts come from.
General information, not legal advice: what applies to you depends on your services and your market.