Everything You Need To Know About Global Business Payments Across Borders

Businesses sending money across borders are all too familiar with the challenges that come with it - hidden fees, unpredictable exchange rates, and lengthy settlement times - each disruption directly impacting cash flow and profitability and making global expansion far more complicated than it should be.

On the bright side, with the global payments market projected to grow to $320.73 billion by 2030, smarter payment systems are stepping in to cut costs, reduce delays, and simplify cross-border transfers. 

In this article, we will understand what global business payments are, some of the common challenges companies face, and how you can manage them better, along with why choosing the right payment platform can make all the difference.

• Through global business payments, companies send and receive payments across borders. These transactions involve multiple currencies, FX conversions, and compliance with local and international regulations.

• Cross-border payments are often challenged by currency fluctuations, complex regulations, and high transaction costs. 

• To address these challenges, businesses can adopt best practices like selecting optimal payment methods that automate compliance, provide low FX conversions, and support real-time payment tracking and faster processing time.

• The future of global payments is shaped by instant cross-border payments, AI-driven foreign exchange hedging, central bank digital currencies (CBDCs), and blockchain payment rails. 

Global business payments are transactions that happen across multiple countries. These transactions usually involve different currencies and foreign exchange operations. 

Businesses use different methods to make global payments; the most common being bank transfers through the SWIFT network that are often slow and expensive due to the involvement of multiple intermediaries. Other methods that companies use are card payments and modern fintech platforms like Xflow, which are faster, easier to track, and often cheaper.

Cross-border payments are a key part of global trade. Let’s take an example to understand how they work. 

Let’s say you are an exporter who has shipped a batch of goods to an overseas client. Once the client receives the goods, you can raise an export invoice to request payment. This is how that payment reaches you across the borders:

1.Initiation

After your overseas client receives the goods, they instruct their bank or a fintech platform to make the payment. The bank collects the necessary paperwork, such as the export invoice and purpose codes, and creates the payment instruction with your (the exporter’s) bank details. 

If the client uses a fintech platform, they simply enter your account details on the platform, upload the export invoice, and select the payment purpose. The platform digitizes and validates these details automatically, generating the payment instruction quickly without heavy paperwork.   

2.Currency conversion

If your client is paying in a different currency, their bank or payment provider converts it into your local currency. The exchange rate applied may not always be transparent and can carry hidden forex charges, reducing the final amount you receive.

Fintech platforms, on the other hand, can provide upfront, real-time FX rates with minimal spreads, making the cost of conversion clearer and usually cheaper.

3.Processing

The payment passes through several intermediaries like correspondent banks or payment networks. Each one may deduct a fee, which eats into the payment by the time it reaches your bank.

The fintech platform will use direct integrations and local payout networks, cutting out unnecessary intermediaries. This reduces both costs and processing times, sometimes settling payments the same day.

4.Compliance checks

Before the funds are released, the transaction is screened for compliance with rules like Anti-Money Laundering (AML), sanctions lists, and fraud checks. If there are missing documents or mismatches, the payment can get delayed or even rejected. 

In the case of fintech platforms, much of the compliance screening is automated, documents are validated digitally, and any risks are flagged instantly to streamline approvals and reduce errors.

5.Settlement

Once all checks are cleared, the money finally lands in your bank account. Both you and your client will receive confirmation that the payment has been completed, closing the loop on your export transaction.

With a bank, settlement can take 2-5 business days, with limited visibility into where the payment is during the process and with fintech platforms, funds often settle in 1-2 days, and both you and your client can track the transaction in real time with status updates.

Global business payments involve more than a simple transaction; multiple processes, tools, and intermediaries are involved to make international transactions secure, fast, and cost-effective. Here are some of the key concepts related to global business payments:

1.Foreign exchange (FX rates)

Whenever you pay or get paid in another currency, the amount must be converted at the current exchange rate. The challenge is that these rates are constantly changing, and even minor changes can impact how much money you will receive at the end.

2.SWIFT

SWIFT stands for the “Society for Worldwide Interbank Financial Telecommunication”. While the SWIFT network itself does not handle money, it acts as an intermediary. It is widely used by financial institutions to send and receive transaction-related information, especially for international wire transfers.

3.IBAN

IBAN is a standardized numbering system that identifies bank accounts involved in cross-border transactions. It is like a detailed address for bank accounts that is understood by financial institutions worldwide. The numbers in IBAN act as a verification system to check errors before transactions are processed.

4.Payment gateways

International payment gateway solutions act as a bridge connecting merchants, customers and their banks. Payment gateways integrate multiple currencies and payment methods, along with providing security features that prioritize fraud detection and compliance checks. 

5.Virtual accounts

Virtual accounts are like smart sub-accounts that live under one real bank account. They don’t exist physically, but they give each customer, region, or business unit a unique account number. 

That way, payments are easier to track, reconciliation is faster, and you don’t need to open a dozen physical accounts. They also handle multiple currencies and give you better visibility of your cash flow.

Businesses today have a wide range of options to make cross-border payments. Understanding how some of these work can help you pick the right method and keep international transactions smooth and cost-effective. Let’s look at some of the most common ways businesses can make global payments:

1.Wire transfers

Wire transfers are one of the traditional methods of cross-border payments. Through wire transfers, businesses can directly move funds in between their banks using networks like SWIFT. It is a highly secure method and has been widely used and accepted.

2.Payment platforms

Payment platforms such as Xflow, Wise, PayPal, etc. offer cross-border payments with multi-currency accounts, competitive FX rates, as well as faster settlement process. These digitalized platforms have integrated APIs and provide intuitive dashboards that simplify payment processing for businesses.

3.Blockchain

Blockchain is a decentralized ledger technology that records transactions across a network of computers instead of relying on central authorities like banks. It is being increasingly used for international trade and settlement because it is faster than traditional payment methods and offers more reliability. 

Beyond speed, blockchain provides transparency, stronger security against tampering, lower costs by removing intermediaries, and 24/7 availability. 

4.Local payout rails

Local payout rails are domestic payment networks in each country that allow international payment providers to plug in directly and move funds locally instead of routing through multiple correspondent banks. This reduces settlement times, lowers costs, and improves transparency for businesses. 

Some examples include UPI, NEFT, RTGS, and IMPS in India; SEPA in the EU; ACH, FedNow, and RTP Network in the US; and PIX in Brazil.

Inbound payments refer to funds received from international clients, partners, or customers, while outbound payments involve the disbursement of funds to overseas suppliers, employees, or service providers. 

Here are some of the differences between inbound and outbound global business payments:

Efficient cross-border payment systems transform the way global businesses operate by providing access to new markets and strengthening trust with international customers and suppliers. Here are some of the benefits of efficient cross-border payments for global businesses:

1. Access to new markets

Cross-border payments allow businesses to sell directly to international customers without any need for physical presence. This lowers entry barriers to international markets and provides global expansion. 

2. Cost management

Modern payment platforms reduce hidden fees and currency conversion costs, allowing businesses to manage multi-currency transactions effectively.

3. Enhanced customer experience

Different regions prefer different payment methods, such as cards, wallets, bank transfers, etc. Offering a wide range of cross-border payment methods makes transactions convenient while building trust and strengthening global reach.

4. Automation and efficiency

Automating payments for things like subscriptions or invoices reduces manual workload, minimizes errors, and improves cash flow visibility. 

Global business payments play an important role in supporting various industries. Here are some use cases of global business payment across different industries:

1. SaaS

SaaS companies handle cross-border payments and support a global customer base. For such companies, a payment infrastructure that supports automation for recurring bills and multi-currency transactions makes the global payment process much easier.

2. Exporters

Exporters often need seamless receipts and payouts, negotiated FX rates, optimized settlement, and proper documentation like Bank Realization Certificate (BRC) (a certificate issued to an exporter in India by a bank confirming payment receipt from abroad) for goods that are shipped all over the world, which is exactly what global payment platforms provide.

3. Agencies

Agencies, whether they’re creative, digital marketing, recruitment, consulting, or travel, all rely on global business payments to keep things moving.  They pay their overseas contractors, receive fees from international clients, or manage cross-border campaigns and services.

4. Freelancers

Freelancers take work from all over the world and receive payments from international clients through digital wallets or global payment systems. They mostly benefit from reduced fees and faster settlement rates.

5. B2B marketplace

B2B marketplaces rely heavily on global payments because they’re constantly connecting buyers and sellers across different countries. Think of a wholesaler in China supplying goods to a retailer in the U.S., the payment has to be fast, secure, and in the right currency. Global payment methods can cater to such needs.

Here are some of the key differences between global business payments and domestic transfers:

While cross-border payments are important for global trade, they don’t come without challenges. Let’s have a look at some of the major challenges in cross-border payments.

1. FX volatility

Foreign exchange rate movements can create uncertainty for businesses. Sudden fluctuations in exchange rates during payment processing can impact the final amount and profit margins. There is also a lack of transparency around foreign exchange rates, often including hidden markups by banks or payment providers.

2. Compliance

Cross-border payments involve navigating laws and regulations of multiple countries, including AML (Anti-Money Laundering), KYC (Know Your Customer), PCI DSS, GDPR, PSD2, and export/import reporting systems such as eBRC, EDPMS, and IDPMS, as well as tax reporting standards. 

Messing up compliance checks can result in your business being fined, additional delays, and operational problems.

3. Delays

Cross-border payments are often delayed by manual bank checks, missing paperwork, compliance reviews, and the involvement of multiple intermediaries. These holdups can disrupt cash flow management and strain relationships with global partners and suppliers.

4. High fees

Cross-border payments can have higher fees compared to domestic transactions due to the involvement of multiple banks, hidden markups on FX rates, or additional charges for urgent payment processing. This makes the overall fee structure unpredictable and often increases expenses.

Managing international business payments involves adopting practices that balance cost efficiency, regulatory compliance, transaction speed, and reliability for smooth transactions. 

Here are some of the best practices for sending and receiving international business payments:

1. Understanding the cost

Before choosing a payment method, it’s better to understand what you’ll be paying them for the transfer. Credit card processing is the most expensive method, with costs typically ranging from 1.5% to 3.5% plus a small flat fee per transaction. 

In contrast, ACH transfers usually cost a flat fee of $0.20 to $1.50, but they are slower. Wire transfers are the most secure way to send money directly between banks, but they are also the most expensive, with a high flat fee that can range from $20 to $50 per transaction.

Online payment platforms have their own fee structures, which are often based on the payment method used, with custom pricing options available.

2. Ensuring regulatory compliance

When it comes to cross-border payments, compliance is a top priority. You need to meet requirements like AML, KYC, and other trade regulations to keep payments moving without hiccups. In 2025 alone, AML fines are expected to reach over $6 billion from $5 billion in 2023, and these penalties often come hand-in-hand with blocked payments and costly delays. That’s why understanding compliance is just as important as making the payment itself.

3. Select the right payment method

Different payment methods, such as bank transfer, wallets, cards, and BNPL, need to be matched with the transaction size and suit your specific business needs. For faster, smaller or recurring payments, methods like digital wallets or cards can optimize cash flow and reduce delays. For larger transactions, bank transfers or wire payments are preferred due to their added security, although they take longer and incur additional charges.

4. Optimize authorization rates

The authorization rate is the percentage of payment attempts that is approved by the customer's bank or card issuer. Low authorization rates can cause lost sales or delayed payments. Work with local PSPs, support local payment methods, and address low authorization rates at checkout for higher conversions. 

Integrating global payment solutions into a finance tech stack, such as ERP systems, accounting software, and treasury platforms, helps to create a direct flow of financial data. Let’s look at how global payment solutions can be integrated with the finance tech stack:

1. Automated reconciliation with ERP

Automated reconciliation is the process of automatically matching payment data with accounting records. When payment systems directly connect to ERP software, invoices and payments are quickly matched and updated.

2. Integration with treasury tools

To integrate with treasury tools, businesses can first standardize their data, including currencies, foreign bank account structures, and account frameworks. Then, they can proceed to choose a middleware, a direct API, or a bank connectivity platform for reliable integration. The end goal of this process is to ensure that you have a single, accurate source of truth for your financial data. 

3. Mapping workflows

It is important that workflows and data flows are accurately mapped out in advance for a smooth integration with the company's IT capabilities. The planning ensures that integration supports operational needs without any issues with existing infrastructure.

4. Choosing the right features

When choosing a software, prioritize one that has API support, can handle multiple currencies, and provides real-time transaction tracking. These features allow businesses to monitor payments and quickly respond to any delays or problems.

Since global payments are funds that move across the globe, businesses must comply with a variety of local and international regulations. These requirements cover aspects such as AML, sanction screening, taxation, and data privacy. 

1. FEMA

FEMA, or the Foreign Exchange Management Act, regulates and controls foreign exchange transactions in India, with the RBI enforcing these rules and regulations. Businesses must comply with these regulations to prevent unauthorized activities and ensure legal compliance. 

To comply with FEMA regulations, you must route your international transactions through RBI-authorized dealers (licensed banks and financial institutions), maintain proper records and documentation, such as the Foreign Inward Remittance Certificate (FIRC) and Importer Exporter Code (IEC), and seek approvals while dealing with sensitive transactions. 

2. SWIFT

SWIFT provides a standardized framework for financial messaging that ensures secure, accurate, and efficient communication among banks and financial institutions worldwide. When payment methods are aligned with SWIFT standards, such as the ISO 20022 messaging format, two-factor authentication, and end-to-end encryption, businesses can significantly reduce the risk of transactional errors, fraud, and regulatory breaches.

3. AML/KYC

AML refers to Anti-Money Laundering. It prevents the flow of illicit funds, terrorism financing, and fraud through financial systems. KYC stands for Know Your Customer, under which businesses must verify the identities of senders and recipients through proper legal documentation. 

You can ensure compliance with these standards by implementing customer verification processes, performing transaction monitoring, and reporting suspicious activities to authorities.

4. Transfer pricing rules

Transfer pricing rules make sure that the profit does not shift between cross-border payments. For example, if a U.S.-based parent company sends inventory to its subsidiary in Germany, the price it sets for that transfer is the transfer price. 

These rules prevent profit shifting with lower tax rates and ensure that the taxation is fair. Compliance involves documenting all the transfer prices, maintaining detailed records, and submitting reports to tax authorities.

As global payment systems continue to evolve, there are some future trends that promise more speed, transparency, and cost efficiency. Let’s have a look at these trends:

1. Instant cross-border payments

Initiatives like SWIFT's Global Payments Innovation (GPI) are all about making money move faster.  The goal is to speed up payment processing so transfers feel almost real-time. In fact, as of now, over 90% of SWIFT GPI payments are credited to beneficiary banks within an hour. 

In addition to that, regional instant payment rails like UPI in India and PIX in Brazil are redefining the instant payment landscape. Interoperability projects, such as the BIS Project Nexus, also aim to offer near real-time processing across borders.

2. AI in FX hedging 

AI can actively monitor all the currency markets and detect fraud in real-time. For example, an AI-powered system can detect early signals of a sudden drop in the euro against the dollar and recommend hedging trades, so that businesses can have an idea of the upcoming fluctuations in foreign exchange rates and are prepared for it. 

3. CBDCs

Central Bank Digital Currencies work by allowing businesses and individuals to hold digital currency in accounts or wallets managed directly or indirectly by the central bank. These digital currencies are backed by the government and promise faster, cheaper, and secure global payments by eliminating a lot of intermediaries that would often cause high fees and hidden charges.

4. Blockchain rails

Blockchain rails are payment networks built on blockchain technology. Unlike traditional payment methods that rely on multiple intermediaries like banks, blockchain rails allow direct transfers. This reduces the transaction cost by eliminating multiple fees and speeds up settlement time.

Transactions on blockchain rails are verified through cryptographic techniques, and after verification, the transactions are added to a decentralized ledger that’s easy to track and difficult to tamper. 

Doing business already comes with its fair share of challenges. Your time should be spent on growing your business, not worrying about cross-border payments. That’s what Xflow, with its speed, transparency, and compliance, can handle with a platform designed to streamline international payments. 

Xflow offers comprehensive features, including:

• Next-day settlements
• Seamless integration with existing ERP and accounting systems
• Smart virtual account management for efficient payment handling
• Generation of shareable payment links with clients
• Multi-currency support across 25+ currencies and 140+ countries
• Issuance of free digital Foreign Inward Remittance Advice (eFIRA) within 24 hours
• AI-powered analytics tool for smarter FX conversions and risk management
• Detailed cost transparency and no hidden fees
• Full control over finances with tools for invoice financing and real-time transaction tracking
• Multi-channel customer support