Driving transformation in cross-border payments

This is an excerpt from a Sibos special edition report: The Future of Cross-Border Payments 2026: Strategies for Success. 

Cross-border payments are the circulatory system of the global economy, enabling everything from daily commerce to large-scale international trade. Each year, hundreds of trillions of dollars move across borders, supporting businesses and economic growth worldwide. Yet these flows remain fraught with friction – relatively high fees, slow processing, and opaque routes that dampen their potential. In an age of instant information, it is striking that moving money internationally is still so cumbersome. Reducing this friction without compromising integrity has become a top priority for banks, regulators, and technology providers alike. 

Having advised financial institutions for decades and now leading strategy at ACI Worldwide, I’ve seen the tension between bold innovation and prudent caution in this arena. Cross-border payments are mission-critical, but they must also be trusted. Every transaction navigates multiple jurisdictions’ anti–money laundering, sanctions, and data privacy rules – non-negotiable requirements for maintaining integrity. The challenge is to make moving money across countries as fast, seamless and approaching the cost of a domestic payment, while upholding security and compliance at every step.

Reducing friction, preserving integrity

The good news is that the industry recognises the need to streamline international payments. Global policymakers – the G20 among them – have set ambitious targets to improve the cost, speed, transparency, and accessibility of cross-border payments, but regulators simultaneously insist that these faster, cheaper transfers must remain secure and fully compliant. 

Technologies like instant payment networks and digital wallets promise to eliminate days of waiting and layers of intermediaries. However, the flip side of greater speed is heightened risk: less time to screen transactions, detect fraud, or halt illicit flows. Banks want to offer near-instant, effortless service, but they cannot compromise on rigorous KYC/AML checks under ever-stricter regimes. It’s a delicate balance between a frictionless customer experience and robust oversight.

Innovations in data and artificial intelligence are helping to square this circle – enabling compliance checks to be faster and more automated – but major pain points persist:

1. De-risking by correspondent banks has left some regions isolated from global networks;
2. Legacy infrastructure still underpins many cross-border flows, introducing delays and inefficiencies;
3. Fragmented systems and formats hinder transparency and straight-through processing; and 
4. High costs remain in certain corridors, partly because fee revenues are difficult for incumbents to forego. Tackling these issues is not simple, but it is necessary to truly reduce friction while preserving integrity. Towards real-time, interoperable payments 

Despite the challenges, cross-border payments are steadily moving toward a real-time future. Domestic instant payment systems now operate in dozens of countries, and efforts are underway to link these networks across borders – showing that money can potentially move internationally 24/7 as seamlessly as it does within one country. Still, achieving genuine global real-time interoperability will require more than technology; it demands alignment on standards, policies, and mutual trust among all participants.

Competition in cross-border payments is also intensifying. Fintechs, large tech firms, and even blockchain-based networks are entering the field, while central banks and industry consortia pilot new interoperable infrastructures. This wave of innovation is healthy, but it also risks fragmentation.

If each new platform remains a closed loop, frictions could increase as isolated pockets of innovation fail to connect. The key to avoiding that outcome is open standards and collaboration. By embracing common data standards and building interoperability frameworks, we can ensure that the proliferation of systems leads to a connected ecosystem rather than a patchwork of silos. 

Likewise, modernising the underlying infrastructure – shifting from batchbased, limited-hours systems to cloud-enabled, API-driven, always-on platforms – is vital for enabling true real-time capabilities.

Looking 15–20 years ahead, we can imagine cross-border payments becoming as instantaneous and reliable as domestic ones, thanks to a “network of networks” that bridges today’s gaps. Realising that vision will require continued investment and partnership among banks, technology providers, and regulators, all aligning on the rules and rails of a next-generation system.

Digital currencies on the horizon

Tokenised money – from private stablecoins to Central Bank Digital Currencies (CBDCs) – is poised to reshape cross-border payments. Stablecoins could allow value to move globally outside of traditional channels, potentially cutting costs and delays. However, they still represent only a tiny share of flows, held back by hurdles like unclear regulation, scalability challenges, and fraud risks.

Meanwhile, central banks around the world are actively exploring digital currencies of their own. An ever increasing number of central banks have initiatives underway to research or pilot CBDCs, signalling that official digital currencies may soon become reality. If major economies roll out interoperable CBDCs, we could see near-instant, atomic settlement of international payments through direct links between central bank ledgers – sharply reducing the need for intermediaries. But many questions remain about how different national digital currencies would interoperate, how currencies would be exchanged, and what role banks would play in this landscape.

In my view, digital currencies will become an important component of cross-border payments over the next two decades, complementing rather than replacing traditional payment rails. Once clear regulatory guardrails are in place, banks will incorporate these new forms of money where they add value (for example, instant retail remittances or corporate treasury transfers), while continuing to rely on conventional networks for other needs.

Ultimately, unlocking the benefits of digital currencies requires deploying them in a secure, compliant, and interoperable way within the broader financial infrastructure. 

Strengthening security and trust

In cross-border payments, speed means little without security and trust. As transactions become faster and more digitised, fraud prevention and cybersecurity grow even more critical. Real-time settlement leaves less time to detect and stop illicit activity, and we have seen increasingly sophisticated scams targeting instant payment channels. Banks are responding with advanced measures – AI-driven anomaly detection that scans transactions in milliseconds, and small “speed bumps” (brief delays or extra verification on high-risk transfers) – to intercept fraud before funds are lost. Collaboration is crucial: by sharing threat intelligence and agreeing on common security standards, the entire network can stay ahead of bad actors.

Regulatory compliance must evolve in tandem. Historically, fragmented systems made end-to-end oversight difficult, but richer data standards and new regtech tools are now enabling more integrated, real-time screening without unduly slowing payments. For faster cross-border payments to truly succeed, regulators may also need to align approaches internationally – a weak link in one jurisdiction can expose vulnerabilities across the network. The system can only move as fast as it is safe, so maintaining trust remains paramount even as we innovate.

A collaborative path forward

I’m optimistic, albeit pragmatic, about what the next decades will bring. The goal is clear: cross-border payments that are as convenient and low-cost as domestic ones – a boon to global commerce and financial inclusion.

Many building blocks are already emerging: instant payment rails, digital currencies, richer data standards, advanced fraud controls, and more. The task now is to assemble these components into a cohesive whole, which will require deep collaboration across the industry. All stakeholders – banks, fintechs, central banks, and regulators – must work in concert, balancing competition with partnership. They must converge on common standards to ensure interoperability and mutual trust, and tackle the remaining technical and regulatory challenges with the same ingenuity that’s driving this transformation.