The future of cross-border payments: Market expansion, CBDCs, and real-time systems

23 September 2025
by Payments Intelligence

What is this article about?

The rapid evolution of cross-border payments driven by technology, regulation, and global economic shifts.

Why is it important?

Efficient, inclusive, and secure cross-border payments underpin global trade, remittances, and financial stability.

What’s next?

Achieving true interoperability across instant payment systems, stablecoins, and CBDCs to unlock scalable, seamless international transactions.

At the intersection of shifting trade dynamics, globalised remote employment, and rapid digitisation sits cross-border payments.

Once dominated by wholesale flows and legacy correspondent networks, the market is increasingly shaped by consumer-driven activity, instant payment rails, and experiments with new monetary infrastructures such as Central bank digital currencies (CBDCs) and stablecoins.

Regional leaders, particularly in Asia-Pacific (APAC) and Latin America, are setting new benchmarks for speed, inclusion, and scale, while regulators and central banks are exploring how innovation can be balanced with sovereignty and interoperability.

The fraught nature of international relations makes developments in cross-border payments unpredictable, but understanding where growth and innovation are concentrated is critical for decision-makers seeking to position themselves in this evolving landscape.

“Cross-border payments are evolving to match the speed and simplicity of domestic transactions. Their next chapter will be defined by interoperability and the seamless movement of different forms of value across a global ecosystem. In this regard, stablecoins could redefine money movement, particularly in business payments, remittances in high-cost corridors, and as a settlement layer to enable faster and more efficient clearing. But their adoption is underpinned by trust.”

“There is a major opportunity for stablecoins to support global financial inclusion initiatives. Utilising these assets in cross-border payments allows users to make instant payments via stablecoin rails, which offer enhanced security and speed whilst eliminating fees. Similarly, those without access to bank accounts in global currencies will be able to hold stablecoins pegged to currencies such as USD or GBP to store their wealth outside of potentially volatile currencies.”

“Cross-border payments are the backbone of global trade, yet they remain slow, costly, and fragmented. Initiatives like ISO 20022 and BIS’ Project Rialto mark progress, but the real breakthrough will come only when governments, regulators, and industry players work together to create common, interoperable standards. Businesses don’t just need faster payments—they need a system that scales seamlessly as they expand into new markets. Speed, however, must go hand in hand with trust. Embedding real-time AML and KYC checks, sanctions monitoring, and AI-driven fraud detection into every transaction can create a 'compliance checkpoint framework' that keeps payments both fast and secure."

“Cross-border payments cover a huge market ($195 trillion according to recent research by FXC Intelligence), so a clear understanding of what type of customers and flows you are addressing is critical. For example, B2B cross-border payments requirements vary by organisation size: SMEs prioritise speed and access to trade credit and partner KYC tools, whereas multinationals focus on reducing FX and volume-based fees. Thus, companies aiming to grow cross-border payments must ensure that they are clear on exactly what their target customers need.”

“The cross-border payments are globally recognised by central banks as being high risk, opaque, slow, costly and not inclusive through financial institutions. We believe that Payall’s global single share platform with end-to-end enabling tools that deal with counterparty and transaction risk, multijurisdictional compliance and complex payment orchestration will be a key factor in overcoming these challenges, so that financial institutions can offer their customers cross-border payments.”

Where are cross-border payments growing?

In absolute terms, the wholesale market is forecast to experience the most significant growth by 2032, expanding by $100 trillion in that time. At 65%, this is also the second-highest relative increase of any cross-border market segment, with business-to-consumer (B2C) growing by 132%. B2C payments encompass various transactions, including refunds, rebates, insurance claims, and payroll, making it unsurprising that this segment is growing in an increasingly remote, globalised ecommerce and employment market.

The APAC region is larger than any other when comparing cross-border transaction value: $19.8 billion was transferred in the region in 2023, compared to $90 billion in Europe, the Middle East, and Africa (EMEA) and $63 billion in North America. The US-Mexico corridor sees the greatest value in remittance payments globally; in 2024, $68 billion was sent from the US to Mexico. The cost of sending $200 from the US to Mexico stood at around 4.94% in Q3 2024.

The lack of interoperability between systems remains a friction point. Without harmonised standards, growth risks amplifying inefficiencies rather than resolving them.

Innovation in cross-border payments

A 2023 survey of 211 banking and payments executives from around the world, run by Accenture, found 68% consider the digitalisation of cross-border payments a priority, the second highest after embedded finance deployment.

Central banks have different priorities. The Official Monetary and Financial Institutions Forum has surveyed central banks from around the world since 2023 to understand what they consider the most promising avenue to improve cross-border payments. Interlinking instant payments systems has been considered the most promising innovation each time the survey has run, and consolidated this dominance, with 46% of respondents selecting this option in 2025, compared to 34% in 2023.

CBDCs have seen more muted interest, declining from 20% in 2023 to 13% this year. Despite this, more than 100 countries are developing or researching CBDCs. There are a range of motivations for developing the technology: in developed countries, preserving monetary sovereignty and improving payment efficiency are key motivators, while emerging markets focus on financial inclusion.

Geographically, the Asia-Pacific region is emerging as the clear leader in cross-border payment innovation. The region already accounts for the highest overall value of cross-border flows, and growth is increasingly being driven by consumer-initiated payments such as e-commerce and international travel.

Europe has prioritised standardisation and sovereignty as levers for improving cross-border payments. The Single Euro Payments Area (SEPA) and the TARGET Instant Payment Settlement (TIPS) system already provide pan-European infrastructure for real-time transfers, though uptake has been slower and more fragmented than the rapid adoption of UPI in India or Pix in Brazil. Policymakers view harmonisation as a long-term play: by ensuring interoperability across member states, Europe is building the foundations for more efficient intra-regional and cross-border flows.

At the same time, the European Central Bank’s digital euro project reflects a broader ambition for strategic autonomy. Concerns over the dominance of US-based card networks such as Visa and Mastercard in European retail payments have emphasised the case for a public-sector alternative that secures sovereignty and data control. While questions remain around privacy, inclusion, and user demand, the digital euro underlines Europe’s determination to retain control of critical payments infrastructure.

The emphasis on interlinking instant payment systems reflects a recognition that innovation is only transformative if new infrastructures can communicate across borders. Interoperability is emerging as the central requirement for scaling digital solutions globally.

Which regions have innovated successfully

Though yet to be applied to cross-border payments at scale, systems like India’s Unified Payments Interface (UPI) and Brazil’s Pix demonstrate how real-time, low-cost payment infrastructures can be scaled rapidly, integrated with digital ecosystems, and increasingly extended to cross-border use cases.

UPI processed 131.1 billion transactions from its ~350 million users in the financial year 2024, while Pix completed 63.4 billion in 2024. Both are free for domestic transactions but incur charges such as international transfer fees, exchange rate markups, and conversion charges.

However, there are several exceptions with UPI, which is accepted in the UAE, Singapore, Bhutan, Nepal, the Maldives, Mauritius, France, and Sri Lanka.

Pix’s cross-border potential lies in its scale, central bank backing, and regional influence. If successfully linked with neighbouring markets, Pix could become the first regional instant payment rail in Latin America, offering faster, cheaper, and more inclusive alternatives to legacy cross-border corridors.

The lessons from UPI and Pix are limited to more developed countries with higher card adoption. Both were deployed in markets with a higher proportion of unbanked citizens than more economically developed countries, where established, profitable banking infrastructure makes a centralised public rail harder to justify.

UPI and Pix illustrate how domestic success stories can set global benchmarks, but their true test lies in whether they can interoperate with other systems abroad. Expanding from national networks to cross-border rails will depend on governance and technical alignment with international counterparts.

In North America, innovation is unfolding through infrastructure modernisation rather than wholesale redesign. The launch of FedNow in 2023 marked the US Federal Reserve’s first real-time payment service, enabling instant domestic transfers 24/7. While still in its early stages, FedNow represents a step towards reducing settlement frictions and could eventually serve as a foundation for cross-border interoperability with systems in Canada or Mexico.

Stablecoins and cross-border payments

Stablecoins are increasingly relevant to cross-border payments. Originally designed to provide a stable store of value in digital markets, USD-backed stablecoins such as Tether (USDT) and USD Coin (USDC) have become widely used for international transfers. The two coins were used to transfer around $400 billion in Q1 2024, based on data from Chainalysis. The appeal lies in speed, cost efficiency, and programmability.

Stablecoins, especially the USD-backed ones mentioned above, comprise a substantial portion of cross-border crypto flows and are particularly popular in emerging economies where traditional remittance costs are high. High-inflation markets such as Argentina, Turkey, and Venezuela are notable for their domestic stablecoin use as currency hedges.

Regulation is advancing: the GENIUS Act in the US, the EU’s MiCA framework, and the UK’s stablecoin framework for issuance and custody mark substantial advances made in the past two years. Such regulatory developments could enable stablecoins to be integrated into mainstream payments, offering corporates, fintechs, and even banks an additional settlement rail.

Yet challenges remain. Stablecoins raise concerns around AML/CTF compliance, reserve transparency, and systemic risk if adoption grows too quickly. Nevertheless, with billions of dollars already moving across borders via stablecoins, they mark a seismic technological development in the payments industry.

CBDCs and the cross-border challenge

Cross-border payments represent one of the most promising, but also most complex, applications for central bank digital currencies (CBDCs). Beyond reducing friction in transactions, cross-border CBDCs could influence international monetary dynamics by improving liquidity, lowering reliance on intermediary currencies, and potentially reshaping how central banks allocate their foreign exchange reserves. This would have long-term implications for global capital flows and the balance of reserve currency utilisation.

Pilot initiatives such as Project Jura in Europe and Project Dunbar across Asia-Pacific and Africa have demonstrated that wholesale CBDCs can accelerate the settlement of foreign exchange and securities transactions. Using distributed ledger technology and delivery-versus-payment mechanisms, these projects showed that shared infrastructure can lower counterparty risk and cut costs. They also highlighted the importance of common technical standards to ensure interoperability.

The main challenge, however, is that most CBDC projects are domestically focused, risking the creation of isolated “digital islands” that cannot interact. Intermediary solutions like Swift’s CBDC connector aim to link disparate systems through hub-and-spoke models, but broader alignment on standards and governance is still needed.

Pilot projects such as Jura and Dunbar underscore the importance of shared infrastructure and technical standards to achieve interoperability. Without it, CBDCs may reinforce the problem of “digital islands” rather than solving it.

Looking ahead

The cross-border payments market is expanding on multiple fronts: wholesale volumes continue to dominate in absolute terms, while consumer-initiated flows are accelerating the fastest. Innovation is not evenly spread, with India’s UPI and Brazil’s Pix demonstrating the potential of real-time systems to extend beyond national borders. At the same time, stablecoins and CBDC pilots highlight both the opportunities and the risks of fragmentation if interoperability is not addressed.