Cross-border payments are transactions that involve the transfer of funds between parties in different countries. These types of payments can be initiated for a variety of reasons, including international trade, remittances, and personal transfers.
Cross-border payments can be more complex than domestic payments due to a variety of factors, including differences in currencies, time zones, and regulatory requirements. The cross-border payments can also be performed in a multitude of methods.
The most common cross-border methods are:
- Bank wire transfers: Funds are transferred between banks using the SWIFT network, which can take several days and may involve fees and foreign exchange charges
- International ACH transactions: These transactions are similar to domestic ACH (automated clearing houses) transactions but involve a different set of rules and regulations for cross-border transfers.
- Cross-border card transactions: Credit and debit cards can be used for cross-border transactions, with foreign exchange fees and other charges applied by the issuing bank.
- Digital wallet transfers: Some digital wallet services offer cross-border transfers, with fees and foreign exchange rates varying by provider.
- Remittance services: Companies specializing in remittance services offer cross-border transfers, with fees and foreign exchange rates varying by provider.