For more than ten years, the global cross-border payments industry has run on a single, successful playbook: Reduce the friction, cost, and time needed to move money from point A to point B. Spurred by competitive fintech entrants, technology modernization, and global and local policy mandates, the industry has largely delivered on that promise. Payments speed has increased significantly. End users’ costs have steadily declined—especially in retail and small business segments—and transparency is increasing.
On the surface, the sector appears stable. According to McKinsey’s Global Payments data, cross-border payments recently reached an estimated volume of $190 trillion, generating a global revenue pool of over $290 billion (Exhibit 1). Revenues are poised to grow at about 4 percent annually. Yet this stability hides the underlying shifts that are set to reshape the cross-border payments industry in the years to come.
$190 trillion crossed borders in 2025, generating $290 billion in revenues.
Note: Figures may not sum to totals, because of rounding. Flows in $ trillion, revenues in $ billion; flows are the average of inbound and outbound payment flows. Revenue margin is revenue as a share of the flow value for each transaction type. Coverage includes 50 countries representing >90% of global GDP; C2C includes >200 countries.
1Consumer to business.
2Consumer to consumer.
The capabilities that once differentiated leading cross-border payment providers—security, speed, and cost—are steadily becoming table stakes. As traditional rails modernize, globally connected and licensed providers proliferate, and new settlement networks emerge, infrastructure-based competitive advantages will steadily erode. At the same time, payments are also moving away from providers’ systems, becoming increasingly integrated into accounting, procurement, and treasury workflows.
It’s becoming clear that for many, moving money will no longer be a viable stand-alone product. It is becoming a feature within broader financial and operational workflows. For banks and fintech specialists, the coming years will bring a structural reset. In this article, we review the forces of commoditization and offer playbooks for both fintech specialists and banks. Both are finding the ground shifting under their feet; both can reposition for the emerging industry structure.
The squeeze: Execution as a commodity
Cost and speed have been the primary battlegrounds in global cross-border payments. While benchmarks such as the UN’s goal to drive average cross-border remittance costs below 3 percent provided highly visible targets, it was mostly the pressure from fintech specialists who led the charge by competing on price, speed, and margin transparency. Over the past decade, they have captured a growing share of cross-border payment volumes—initially in consumer payments and remittances (about 50 percent), but increasingly across small-business and small-and-medium-size enterprise (SME) flows (about 20 percent) (Exhibit 2). As the broader industry responds to these three market pressures, it will likely be caught in a vise of commoditization, reaching an unsustainable and unprofitable baseline.
Nonbank providers already capture half of retail payments, with focus shifting to SME payments as the next frontier.
Note: Shares of bank and nonbank providers sum to 100%. “<1,” “<5,” and “~99” denote approximate shares.
The price floor: On the road to zero fees
Margin compression in the payment flows of core retail and small and medium-size businesses is no longer just the gradual trend visible in headline averages. According to recent World Bank data, while the overall average cost of sending a $200 remittance fell only from 6.8 percent in 2019 to 6.3 percent in 2025, average costs in digital-only channels have fallen below 5 percent, with the most competitive corridors already priced at or below the UN’s 3 percent target. The G20 has set an even more aggressive mandate for broader retail payments: reducing total costs to less than 1 percent—a figure that explicitly includes up-front fees and foreign-exchange (FX) spreads. This trend is most advanced in high-volume G7 corridors, while more complex and lower-volume corridors continue to command higher economics—for now.
Pricing pressure has come mainly from a new generation of fintech challengers. Consumer-focused players such as Wise and Revolut built their brands around transparent exchange rates and low-cost international payments, while B2B specialists such as Airwallex applied the same model to businesses by reducing payment fees, narrowing FX spreads, and simplifying international treasury operations.
To defend their primary customer relationships, banks are increasingly making their cross-border payment offerings more price-competitive. Recent examples include KBC’s launch of a multicurrency wallet that allows customers to exchange at market rates without an FX commission up to €1,500 per month,1 Bank of America’s waiver of outbound wire fees2 for international transfers sent in foreign currencies, and HSBC’s global money transfers service, which offers fee-free international transfers3 in many markets while monetizing primarily through FX spreads.
As traditional banks reduce or eliminate explicit transaction fees, the ability to charge a premium simply for moving money across borders is rapidly disappearing.
The speed floor: Instant is the new table stakes
Historically, international payments were slow, often taking several days to reach the beneficiary and offering limited visibility into where funds were in transit. Today, that baseline has fundamentally changed.
The first wave of innovation came from specialist providers that rethought the traditional correspondent banking model. By establishing a presence on both sides of a transaction and establishing local balance sheets, licenses, and payment connectivity, companies like Banking Circle and Wise created a viable alternative in some high-speed corridors to the older system. This enabled same-day—and increasingly, near-real-time—delivery in many payment corridors. Fintech providers have since refined this model further through partnerships, selective licensing, and sophisticated liquidity management.
At the same time, the incumbent infrastructure is rapidly modernizing. Domestic real-time payment systems are gaining more connections across borders through initiatives such as Buna in the Arab region and Project Nexus in Asia. Meanwhile, Swift’s recently announced retail-payments scheme seeks to address the remaining bottlenecks in correspondent banking by introducing a common rulebook and service standards for the retail payment experience, including the “last mile” between the receiving bank and the beneficiary.
A third wave of innovation is emerging through digital-asset-based settlement models. Stablecoins provide an alternative mechanism for transferring value across borders, while tokenized deposits promise instant settlement within—and increasingly between—financial institutions through interoperable tokenized networks. Today these models are particularly relevant for some treasury, wholesale, and niche use cases; broader adoption is yet to come. Several industry initiatives on digital assets are looking into cross-border payments as a key use case including the euro-denominated stablecoin to be launched by Qivalis and Open USD, the shared stablecoin infrastructure initiative with more than 140 members. (Our colleagues recently shared a perspective on the emerging digital money stack.)
Taken together, these developments are rapidly making instant and near-real-time cross-border payments the market standard, particularly for major currency corridors.
The margin squeeze: Regulation and compliance
While market competition—not regulation—has been the primary driver of lower prices for end users, regulation has accelerated the commoditization of cross-border payments in two important ways.
First, policymakers have significantly increased pricing transparency. Regulations such as the European Union’s Cross-Border Payments Regulation and payment-service rules, along with comparable consumer protection measures in other jurisdictions, require providers to disclose fees and foreign-exchange charges more clearly and, in many cases, before a transaction is initiated. As pricing becomes easier to compare, customers are better equipped to switch providers, intensifying competitive pressure and making it increasingly difficult to sustain hidden margins through opaque fee structures or foreign-exchange spreads.
Second, compliance complexity is increasing alongside ecosystem complexity. As payments move beyond traditional bank-to-bank correspondent networks into interconnected ecosystems of banks, fintechs, and wallet networks, the division of responsibilities for anti–money laundering (AML), sanctions, and fraud monitoring among participants becomes less straightforward. Managing these increasingly distributed compliance obligations raises operational costs even as customers expect faster, cheaper, and more seamless payment experiences.
The result is a structural margin squeeze. Providers face rising compliance costs while competitive and regulatory forces continue to push transaction revenues downward. Operational excellence increasingly becomes critical: Many providers are turning to AI and data analytics to improve screening accuracy, reduce false positives, automate investigations, and maintain regulatory compliance without compromising speed, customer experience, or economics.
The new frontier: Advisory, workflows, and orchestration
As execution margins continue to contract, value is shifting from payment execution to the broader services that surround it. For consumers, providers are increasingly creating value through integrated propositions that combine multicurrency accounts, foreign direct debits, payment cards, and other everyday banking services. For businesses, the opportunity lies in solving the operational and financial complexity surrounding international commerce—from treasury and foreign exchange to invoicing, reconciliation, and workflow automation. It is this business opportunity that we explore in the remainder of this article, beginning with three hallmarks of the emerging industry.
Customers’ volatility trap: Transitioning from rails to advisory
For internationally active midsize companies, cross-border exposure has become riskier. Reconfiguring global supply chains, geopolitical realignments, and shifting trade corridors have injected significant unpredictability into currency markets. Foreign-exchange turnover hit a record $9.6 trillion per day in April 2025, 25 percent above 2022 levels, as tariffs roiled major currencies.
The scale of this volatility is evident in rapid shifts in regional trade corridors. For instance, trade between the United States and China fell by roughly 12 percent in 2025. Much of the decline was redirected to Association of Southeast Asian Nations (ASEAN) economies; Vietnam alone recorded 17 percent growth in exports. India offers another example, exporting an additional $15 billion in smartphones to the United States that were previously sourced from China.
While a plethora of providers offer small businesses low-cost, efficient cross-border payment execution—and surveys and our research consistently show increasing appetite for nonbank providers among SMEs—price alone is unlikely to determine the long-term winners.4 Low-cost payments may be sufficient to attract businesses with straightforward international transactions such as sole traders, but winning and retaining companies with more complex import, export, and treasury needs requires a broader proposition.
These businesses do not simply need a cheaper way to move money; they need tools to manage FX exposure, liquidity, and cash flows across multiple markets. Increasingly, they also expect intelligent, AI-enabled recommendations that help them make better decisions in real time.
The integrated ecosystem: Moving payments from product to feature
For the average business, initiating a transfer accounts for only a fraction of the work involved in an international payment. The real operational friction lies in the manual workflows surrounding the transaction: invoice matching, accounts-payable approvals, tax compliance, and enterprise-resource-planning (ERP) reconciliation.
A stand-alone payment terminal or banking portal forces employees to manually bridge these steps. Integrating payments directly into payroll, accounts receivable, or treasury workflows removes the manual effort and allows for near-instant reconciliation.
Regulation is further exposing the weaknesses of fragmented payment and administrative workflows. For example, more than 80 countries have introduced or mandated e-invoicing regimes, requiring businesses to exchange standardized invoice data, comply with real-time tax reporting requirements, and maintain digital audit trails. These obligations are difficult to meet when invoicing, payments, reconciliation, and tax reporting are managed across disconnected systems.
As a result, companies increasingly seek to replace siloed processes with integrated platforms that automate the entire order-to-cash and procure-to-pay cycle—from invoice creation and tax validation to payment execution and reconciliation. While the market for these platforms has matured over the past decade, what’s changing now is that payment execution is built directly into the stack, rather than bolted on separately.
The orchestration layer: Payments as infrastructure
As payment execution becomes increasingly standardized, another source of value is emerging: enabling others to offer global payment capabilities without building global infrastructure themselves. Rather than serving end users directly, a growing class of providers is positioning itself as the orchestration layer behind banks, fintechs, software platforms, and marketplaces.
These providers aggregate access to correspondent banking, domestic real-time payment systems, cards, digital wallets, and emerging settlement mechanisms such as digital assets behind a single integration. This allows their clients to rapidly expand their global reach, diversify execution across multiple rails, and deliver funds to the payment endpoint best suited to each market—whether a bank account, a wallet such as India’s Unified Payments Interface ecosystem, or another local payment method.
What this means: A structural reset of the industry
Taken together, these forces point to a fundamental shift in the cross-border payments landscape. What was once a scale and execution-driven industry is rapidly moving toward a model where traditional sources of advantage—efficient routing, proprietary infrastructure, and pricing—are no longer sufficient to sustain differentiation.
In this environment, the winners will be those who execute payments efficiently while also repositioning themselves within the value chain and capture emerging sources of value. Both fintechs and banks have a range of attractive options.
The fintech playbook: Strategic directions for payment specialists
As payment execution becomes increasingly commoditized, only providers with sufficient scale will be able to sustainably compete based on price and speed alone. The next generation of winners will therefore need to move beyond payment execution itself, building business models in which cross-border payments become one capability within a broader value proposition.
We see four strategic directions emerging (Exhibit 3).
Cross-border payment specialists can choose from four directions.
Note: These directions are not mutually exclusive; leading players may combine several over time.
Become a business operations platform
One path is to embed cross-border payments into the day-to-day operations of internationally active businesses. Providers can simplify how companies buy, sell, pay suppliers, collect funds, and manage employee spending.
This expansion naturally extends into accounts payable and receivable, e-invoicing, approval workflows, ERP integration, corporate and virtual cards, expense management, embedded payment acceptance, and automated reconciliation. Artificial intelligence will further strengthen this proposition by automating invoice matching, coding accounting entries, resolving payment exceptions, scheduling payments, and proactively identifying opportunities to improve working capital. The result is a finance function that spends less time on administration and more time creating value.
Airwallex and Tipalti illustrate this direction. Airwallex in particular has established itself in cross-border payments and progressively expanded into business accounts, global collections, accounts payable and receivable, expense management, corporate cards, and embedded finance.
Become the modern transaction bank
A second path is to evolve from a payment specialist into the primary financial partner for internationally active businesses. In this model, long-term economics are generated through a broader transaction banking relationship.
The opportunity extends well beyond payment execution into multicurrency accounts, liquidity management, cash management, foreign exchange, working capital finance, lending, and interest-bearing balances. As providers gain greater visibility into customers’ cash flows, they become increasingly well positioned to help businesses optimize funding, deploy liquidity, and manage financial risk.
Historically, sophisticated treasury advice and FX risk management were largely reserved for multinational corporations. Advances in AI create the opportunity to democratize these capabilities, providing SMEs with real-time recommendations on liquidity optimization, hedging strategies, funding decisions, and cash deployment. In doing so, providers move from executing transactions to actively improving customers’ financial performance.
Ebury exemplifies elements of this evolution. While originally focused on foreign exchange and international payments, it has steadily expanded into broader treasury services and financial advisory.
Become deeply entrenched in a niche
Rather than broadening horizontally, some specialists will build more durable competitive advantages by becoming indispensable within highly specialized customer segments where cross-border payments represent only one step in a much larger operational process. In these niches, customers value domain expertise, compliance, and workflow integration far more than the mechanics of moving money.
International education provides a compelling illustration. Flywire has built a leading position not because it offers the cheapest payment rail, but because it combines payment execution with student onboarding, institutional reconciliation, local payment methods, and administrative workflows tailored to universities and students. Similar opportunities exist in areas such as healthcare reimbursements, global payroll, creator payouts, and other operationally complex ecosystems.
Become a multirail orchestrator
A fourth direction is to embrace infrastructure rather than compete against it. As domestic real-time payment systems become interconnected and new settlement mechanisms such as stablecoins and tokenized deposits emerge, advantage will shift away from ownership of a particular payment rail toward intelligent orchestration of an increasingly fragmented infrastructure landscape.
Orchestrators abstract complexity by dynamically routing transactions across correspondent banking, domestic instant payment systems, card networks, digital assets, and future settlement mechanisms, continuously optimizing for cost, speed, liquidity, and regulatory requirements while exposing a single integration layer to customers.
Platforms focused on infrastructure and banking as a service can future-proof their offerings by complementing their proprietary rails and by deploying intelligence (potentially AI enabled) to assure the best possible execution of upstream payment instructions, whether high-volume batch payout, high-value treasury movements, or individual consumer transactions.
Providers such as Thunes and Nium illustrate this direction. Their value is not solely based on owning proprietary payment rails but increasingly it is driven by intelligently orchestrating a fragmented payments ecosystem, allowing banks, fintechs, and enterprise platforms to offer global cross-border capabilities while abstracting away the complexity of connectivity, liquidity management, and execution.
From specialists to platforms
These four strategic directions are not mutually exclusive. Indeed, the strongest players are likely over time to combine elements of several. What unites them is a common shift in where value is created. Rather than monetizing the movement of money itself, future leaders will increasingly generate revenue from software, financial services, operational workflows, and advisory capabilities that surround the transaction.
This shift will also support further acceleration of the pace of consolidation in the industry. As transaction margins compress and investment requirements in compliance, AI, liquidity management, and infrastructure continue to rise, scale becomes a structural advantage.
The banking playbook: Winning beyond payment execution
For banks, the challenge is broader than simply modernizing payments infrastructure or creating new rails such as bank-led digital-asset consortia. Faster rails, better connectivity, and lower-cost execution are increasingly becoming table stakes rather than sources of competitive advantage. Scale, correspondent networks, balance sheet strength, and customer trust remain meaningful assets, but on their own they will neither protect nor grow banks’ cross-border payments income.
The immediate risk extends well beyond payment fees. As customers increasingly separate where they hold deposits from where they execute international payments or foreign exchange, banks risk losing not only transaction revenues but also the operational deposits attached to internationally active customers.
For banks, the strategic challenge is therefore no longer simply how to improve payment execution, though that quest remains important. It is to decide which parts of the expanding cross-border value chain to own, which to orchestrate through partnerships, and which to consume as infrastructure.
Own the customer relationship, not every workflow
Banks should resist the temptation to build every adjacent capability themselves. Instead, they should identify the customer journeys where they have structural advantages and focus their investment there.
For internationally active corporations, this may mean banks should ensure continued focus on treasury management, liquidity solutions, foreign exchange, trade finance, and credit—areas where banks can deploy their strengths: balance sheets, regulatory trust, and relationship managers. For retail customers, it may mean building differentiated international banking experiences around multicurrency accounts, cards, savings, lending, and wealth management.
Other workflows may be better served through partnerships. Few banks will develop best-in-class accounts-payable software, payroll platforms, or industry-specific operational solutions. Instead, they can increasingly embed their payment capabilities within specialist software ecosystems or integrate third-party solutions directly into their digital channels.
Be deliberate about where to own execution
Not every payment corridor or use case warrants proprietary infrastructure. Global institutions with significant transaction volumes, direct clearing access, and large correspondent franchises will continue to invest in modern payment capabilities and multirail orchestration where scale creates sustainable competitive advantages. For many regional and domestic banks, however, replicating global infrastructure across every market is unlikely to generate attractive returns.
Instead, payment execution will increasingly become a strategic portfolio decision. Banks may choose to own execution in corridors where they have meaningful scale, local market presence, or regulatory advantages, while relying on specialist providers or infrastructure partners elsewhere. Consumer international payments already illustrate this trend, with banks embedding services from providers such as Wise to offer competitive pricing and faster execution while preserving the broader banking relationship.
Move from execution to democratized advice
Banks possess a deep understanding of their customers’ overall financial position. As geopolitical uncertainty, supply chain reconfiguration, and FX volatility increase, internationally active businesses are placing greater value on liquidity management, hedging, cash forecasting, and treasury optimization than on marginal improvements in payment execution.
Historically, these capabilities were mostly reserved for large corporations. Advances in AI now create the opportunity to democratize treasury advisory by delivering real-time recommendations on liquidity optimization, funding decisions, cash deployment, and FX risk directly through digital banking channels.
From product providers to ecosystem orchestrators
The future competitive landscape is unlikely to divide neatly between infrastructure owners and infrastructure users. Most successful banks will combine elements of both. They will continue to invest where ownership creates strategic advantage, partner where specialists deliver superior customer outcomes, and consume increasingly commoditized infrastructure where differentiation no longer justifies investment.
The commodity trap is closing, but far-sighted payments firms can build a new model that may prove just as successful as the current playbook has been.
