Cross-border payments are financial transactions in which the sender and the recipient are based in different countries. These payments are commonly used by individuals, businesses, and governments – for example, a person sending money to family overseas or a company paying a supplier abroad.
Also referred to as international payments, cross-border payments are a critical part of the global economy. It has been estimated by FXCintelligence that the TAM of the cross-border payments market was $194.6 trillion in 2024, projected to reach $320 trillion by 2032.
Unlike domestic payments, cross-border payments often have added complexity. Currency conversions, multiple banking intermediaries, and regional regulations all contribute to varied processing times and potentially higher costs.
That complexity isn’t inevitable. Providers like Privalgo aim to simplify international payments and improve efficiency. But before exploring alternatives, let’s break down how cross-border payments actually work.
Table of contents
- How do cross-border payments work?
- Common forms and uses of cross-border payments
- Common cross-border payment challenges
- Why cross-border payments matter for global business
- How Privalgo can help your cross-border payments
How do cross-border payments work?
While the process varies by provider and region, cross-border payments typically follow these steps:
- Select a payment method – e.g. card, bank transfer, or eWallet.
- Check exchange rates – if currencies differ, expect a markup or conversion fee.
- Enter recipient details – including name, banking info, and destination country.
- Verify the payment – verify the amount and identity before authorising.
- Authorise the payment – so it can be sent and routed through financial networks or payment providers.
- Track the payment – if the option is available (dependent upon the provider)
Despite the process being relatively straightforward, challenges can still arise from regional regulations, currency fluctuations, and banking systems. Regardless, cross-border payments remain essential for global trade and can be done in a variety of ways.
Various cross-border payment methods
One of the most important factors in a cross-border transaction is the payment method. It directly affects processing time, fees, exchange rate, regulations, and availability.
There are a variety of payment methods, each with its own strengths and limitations. Some of the most common include:
- Bank transfers and wire transfers – used for high-value B2B and B2C payments, processed via SWIFT or correspondent banks.
- Credit and debit card payments – common in global eCommerce; processed via Visa, Mastercard, etc.
- eWallets – intermediary services linked to bank accounts or cards.
- Digital currencies – decentralised or stablecoin payments across borders.
- Mobile wallets – app-based payment systems linked to mobile numbers or devices.
- Buy Now, Pay Later (BNPL) – cross-border payment instalment options.
Some methods prioritise transparency and security, while others offer lower costs and faster processing. Ultimately, your payment method shapes the entire transaction experience.
To determine which method is best suited for your needs, it helps to first understand the common forms and use cases for cross-border payments.
Common forms and uses of cross-border payments
Cross-border payments can be grouped into four primary forms, each serving distinct purposes:
Consumer-to-consumer (C2C)
Consumer-to-consumer transactions can simply be remittance, someone sending money to a relative overseas. Common methods for C2C transactions include individual bank transfers or eWallets.
This cohort generally doesn’t need to deal in large amounts, and is generally only sending from one account to another.
Consumer-to-business (C2B)
Consumer-to-business transactions cover people sending money to businesses overseas. For example, this could be a tourist booking a hotel abroad.
These transactions are often covered by payment providers, who will have a platform for the customer, and then operate as a B2B transaction with the overseas business.
Business-to-business (B2B)
Payments between businesses (B2B) make up the vast majority of cross-border payments.
According to a study from Grand View Research in 2024, 72.6% of all cross-border payments are B2B.
B2B cross-border payments can be anything from manufacturing payments, such as a car company in the US paying for steel manufactured in China, to financial services from one country to another, to payments between governments.
Business-to-consumer (B2C)
B2C payments will cover payments from businesses to individuals. This could include payment to freelancers abroad, or paying customers overseas. However, in many cases, businesses will use a B2B transaction to facilitate payments.
Most common types of cross-border payments
Other common uses of cross-border payments include:
- International trade
- Travel and tourism
- Remittances
- Investments
- Charities and donations
These various forms and uses reinforce the flexibility and importance of cross-border payments in today’s global economy.
Understanding the purpose and structure of your transaction is essential, but equally important is recognising the common challenges that can occur when sending money across borders.
Common cross-border payment challenges
Though convenient, cross-border payments can still present complications that disrupt the transaction process for both senders and recipients.
Due to the complexity of international systems and provider differences, payments may not always go as planned, requiring businesses to be prepared with the right knowledge and resources.
Common challenges include:
- Currency fluctuations – exchange rates can change rapidly, impacting the final amount received.
- Payment method limitations – not all methods are available or supported in every region.
- High or unpredictable costs – fees from intermediaries, currency conversion, or hidden markups can add up quickly.
- Regulatory friction – compliance with regional, national, or transaction-specific laws may delay processing.
- Lack of transparency – some providers offer little visibility into fees, exchange rates, or transaction tracking.
- Security risks – fraud, data breaches, and money laundering concerns can complicate or stall transfers.
The extent of these challenges often depends on the method used and the provider chosen, making it essential to approach international payments with strategy and care for individuals and businesses alike.
Why cross-border payments matter for global business
For businesses, cross-border payments aren’t optional – they’re an essential means for operating beyond domestic borders. As globalisation rises, more companies rely on these systems to serve international markets, manage remote teams, and pay foreign suppliers.
One major driver is the explosion of international trade and cross-border eCommerce, which is projected to reach $6 trillion by 2027. To tap into this growth, businesses need payment systems that are fast, flexible, and transparent – especially in regions with unique regulations, emerging markets, and consumer preferences.
Cross-border payments also improve cash flow and operations. Many platforms now focus domestic and international transfers onto a single system, offer mobile capabilities, and enable scheduled invoice payments, boosting visibility and influence at scale.
Customers, too, have growing expectations. They want fast settlement, fair exchange rates, and transparent fees. Companies that meet these demands build trust and increase retention in competitive markets.
Whether expanding into new regions or managing global partnerships, businesses that invest in strong cross-border payment solutions are better equipped to scale, adapt, and compete internationally.
Here’s how Privalgo can help:
How Privalgo can help your cross-border payments
Privalgo helps businesses streamline their cross-border payments through a blend of technology and personalised service.
Whether you’re sending payments to suppliers, managing payroll, or expanding into new markets, Privalgo gives you the tools to move money effectively.
Our batch payment technology lets you pay thousands of suppliers or employees in local currency with just a few clicks. Paired with customisable reporting, you gain full visibility and control across your global payment activity.
Speed matters. With Privalgo, you can send and receive funds the same day, the next day, or on a set schedule through a platform designed to eliminate delays and protect cash flow.
Privalgo enables secure, cost-effective transfers through multi-tier systems designed for high-value transactions.
Lastly, Privalgo’s client portal is built with transparency at its core. It shows you the exchange rates you’re offered, the ones you’re buying at, and the difference, so you always know where your money’s going. We always offer the best possible rates to our clients.
With Privalgo’s international payment solutions, cross-border transfers don’t have to be expensive, slow, or complicated.
Get in touch with a Privalgo Currency Specialist today to trade uncertainty for clarity and find a solution that works for your business.
