This is an excerpt from a Sibos special edition report: The Future of Cross-Border Payments 2026: Strategies for Success.
Cross-border payments are booming and show no sign of slowing down, with research from January 2025 forecasting the market to grow to
$320 trillion by 2032. Yet as fintech firms and other tech-first financial institutions reimagine cross-border payments and exerting significant pressure on the business models of incumbents.
Frantz Teissèdre, head of public affairs, cash clearing services, Société Générale, observes: “From a purely technical perspective, many crossborder valid initiatives are currently available. However, financial actors typically seek critical mass before
committing to a particular solution. With constrained budgets (in terms of finance, IT, and HR) and looming fragmentation, the cross-border financial industry requires an orchestrator who can align all stakeholders to move in the same direction within the
same timeframe. This is a role for proactive regulators and leading market infrastructures.”
“New regulations are setting the stage for the evolution of the cross-border payment ecosystem,” adds Katja Lehr, managing director of EMEA payments and commerce solutions at J.P. Morgan Payments. “These regulations aim to address long-lasting barriers to
the cross-border payment market’s development, which today needs to rely largely on correspondent banking as the most reliable (and often only viable) option.”
So how are current and new frameworks and regulations affecting PSPs and the broader cross-border landscape? How do advancements in open finance reshape existing business models in the space?
Progress (or lack thereof?) of the G20 roadmap
Introduced in 2020, the G20 roadmap for improving cross-border border payments addresses for key areas and set out goals to reach by 2027:
- Access: By 2027, all end-users should have at least one infrastructure or provider option available for sending and receiving cross-border electronic payments.
- Cost: Within retail, the global average cross-border payment cost should be no more than 1%, with no corridor seeing average costs above 3%. In addition, the global average cost of sending $200 in remittance is to be no more than 3% by
2030, with no corridors exceeding a 5% cost.
- Speed: 75% of cross-border payments, across wholesale, retail, and remittance, should provide fund availability to recipients within one hour from the time the payment is initiated.
- Transparency: All payment service providers (PSPs) should offer payers and payees, at a minimum, the following three pieces of information: total transaction cost (showing all relevant charges), expected time to deliver funds, and payment
status.
Annelinda Koldewe, global head of payments and cash management at ING, explains: “Evolving regulatory frameworks with initiatives such as G20 roadmap and open finance are paving the way for interconnected data infrastructure, accelerating the transformation
to borderless payments, commerce, and cash management. By leveraging APIs any platform – such as treasury systems, ERPs or marketplaces – can communicate with any bank, enabling tailored set-ups, providing real-time visibility, streamlining sending payments.
Seamless data exchange next to fast transaction processing and improved access to information are making sending and receiving money beyond borders better suited to meet the demands of international business.”
Kirsty Garrett, global head of sales at Crown Agents Bank, further emphasises the positive impact this would have on markets: “The Roadmap’s guidance on transparency in reporting is instrumental for emerging and frontier markets’ financial inclusion and
sustainable development. Without those structures, the payments industry may experience further leakage out of official financial channels and into the back-market.”
Director of payments and digital assets at the Financial Conduct Authority (FCA), Matthew Long, details that the FCA is working on innovating open finance strategies, stating that it is “key to enabling a healthy, safe, and competitive sector.”
Yet industry progress toward the G20 goals falls below expectations. The FSB’s most recent
progress report states that “more progress will be needed to meet the targets across all market segments.”
The European Digital Identity Regulation, PSD3, FIDA, and open finance
While the G20 targets are not enforceable by legislation, there are several pieces of regulation that are.
European Digital Identity (EUDI) Regulation
Designed to advance digital identity in the EU, the EUDI Regulation will enable the creation of a universal, trustworthy, and secure European digital identity wallet. It addresses the shortcomings of the existing eIDAS by extending the framework for digital
identity and its benefits to the private sector. The framework has entered into force and mandates member states to provide EU Digital Identity Wallets to their citizens by November 2026.
The wallets aim to make accessing of public and private service more seamless, secure, and transparent by giving users increased control over their data and by reducing cost of authentication for service providers. Largescale pilot projects are underway
to test technical specifications and software prototypes for the wallet and assess its usability in scenarios such as opening bank accounts and facilitating secure online payments.
PSD3
The third Payment Services Directive (PSD3), introduced in 2023, is not expected to be enforced before 2027. When it comes to cross-border payments, one of the goals of PSD3 is to increase transparency and reporting requirements to improve tracking and authentication
for payments. It also aims to establish clear foreign exchange rates and provide clear settlement times.
PSR
The Payment Services Regulation (PSR) was introduced alongside PSD3 as a component of the PSD2 update. PSR covers security, strong customer authentication and obligations of PSP, and, together with PSD3, aims to courage open banking adoption.
Financial Data Access (FIDA) framework
Similarly to PSD3 and PSR, the Financial Data Access framework builds on the groundwork laid by PSD2 and is designed to enable efficient, secure, and consumer-controlled access to financial data in the EU. This will level the playing field and strengthen
competition by enabling market entry for thirdparty providers and fintechs and ultimately help develop more innovative financial products and services. The implementation is expected to begin around 2027.
As evident by the outlined frameworks above, regulations that enable the shift from open banking towards open finance ultimately have a knock-on effect on cross-border payments. Susanne Prager, head of cash management at RBI, comments: “In Europe for instance,
PSD3 and the proposed Financial Data Access (FIDA) framework will extend open finance beyond payments to broader financial data sharing. This will make it easier for customers to compare providers, switch services or integrate cross-border payments into multi-bank
or multi-provider platforms.
“These changes encourage greater standardisation, interoperability and collaboration across the ecosystem. At the same time, they open the door to new competitors - such as fintechs and non-bank platforms - that can leverage open data, advanced technology
and lighter infrastructure to deliver faster or more tailored services. For the entire financial ecosystem and certainly also for traditional banks, this means rethinking service models, investing in technology and building partnerships to stay competitive
while meeting evolving customer and regulatory expectations."
Source: Capco
David Rego, global head of payments at Standard Chartered, adds: “This regulatory landscape incentivises incumbents to either rapidly innovate and redefine their value propositions beyond mere transaction processing or strategically collaborate with new
entrants to maintain market share.”
How will regulation and advanced open finance frameworks affect cross-border payments?
The regulatory landscape, combined with the foundation laid by ISO 20022's streamlined messaging standards, are set to share cross-border payments for the foreseeable future.
“Emerging technologies will transform cross-border payments by building upon the enhanced data foundation that ISO 20022 provides,” comments Arancha Sánchez, chief technology officer, PagoNxt. “For instance, blockchain and distributed ledger technologies
will enable near-instant, low-cost international transactions, bypass traditional intermediaries and reducing settlement times from days to seconds. AI, meanwhile, will leverage the rich, structured data provided by ISO 20022 to enhance real-time fraud detection,
automate compliance checks, and streamline operational workflows, resulting in fewer errors and reduced risk for all stakeholders in the payments value chain. The combination of ISO 20022’s harmonised messaging standard with these innovations will create a
more interoperable, resilient, and inclusive global payments ecosystem.”
This sentiment has been shared by various industry experts that Finextra has spoken to. Others emphasised how cryptocurrencies and stablecoins will increasingly play a role in cross-border payments, especially in light of emerging regulation of cryptocurrencies
such as MiCA.
Markets in Crypto-Assets (MiCA) Regulation
MiCA introduces uniform market rules for crypto and covers assets that are not currently regulated by existing financial services regulation. The legal framework is designed to support market integrity and financial stability, and the deadline for general
compliance with MiCA requirements is current set for July 2026.
Marcus Mølleskov, chief risk and compliance officer at Januar, states: “With MiCA, the G20 roadmap, and other global frameworks, stablecoins are moving from innovation on the edge to regulated instruments within the financial system. This opens new possibilities
for cross-border payments. open finance is not just about access to data, but access to infrastructure. Regulated stablecoins are enabling new models of money movement that operate alongside and beyond traditional banking systems.”
Mostapha Tahiri, executive vice president and chief operating officer at State Street, additionally expects cryptocurrencies to increasingly enter the mainstream. “We expect a shift from correspondent banking to multirail orchestration, blending SWIFT,
crypto rails (e.g. Ripple, Stellar), and domestic RTGS. Business models will increasingly emphasise platform-based connectivity, data monetisation, and compliance-as-a-service,” he comments.
There are various scenarios of what the future of cross-border payments holds, but it is clear that the cross-border payments of tomorrow will be shaped by the legal frameworks and technology innovations that are being put in place today. While the financial
services sector faces an unprecedented level of regulatory complexity, if organisations reap the benefits that frameworks such as PSD3 and FiDA offer, their cross-border offerings can become more open, transparent, secure, and efficient.