Why Are Businesses Turning to Fintech for Cross-Border Payments?

In January 2025, BlackRock integrated technology from Zurich-based fintech firm Investment Navigator into its Aladdin Wealth platform. This collaboration aimed to enhance cross-border compliance and product distribution, enabling financial advisors to present portfolio proposals more effectively and manage the complexities of international investing. 

Also, in January 2025, UK-based payments fintech Sokin secured $15 million in debt funding from funds and accounts managed by BlackRock. This investment was intended to support Sokin’s mission to transform cross-border payments by providing cost-effective and efficient international payment solutions for businesses. 

These examples illustrate how BlackRock is leveraging fintech partnerships to improve cross-border payment processes, making them more efficient and compliant with international regulations.

As per the Allied Market Research report, the global cross-border payments market, which was valued at USD 181.9 billion in 2022, is estimated to grow at a CAGR (compounded annual growth rate) of 7.3% to reach the projected value of USD 356.5 billion by 2032. 

With global trade climbing to new heights and the expansion of digital businesses, the cross-border payments market is also growing with demand for cutting-edge payment solutions. International businesses are turning to fintech for new cross-border payment infrastructure.

Role of FinTechs in Redefining the Cross-Border Payment Landscape

Cross-border payments for business dealings traditionally came with numerous complexities. This includes reliance on a layered banking system involving regulatory bodies, banks, clearinghouses and several intermediaries. Each layer added additional complexities to the entire process. Currency conversion, navigating the diverse regulations and laws across the border, transaction costs, hidden fees, security risks, settlement delays, reconciliation challenges and more. 

FinTechs are addressing these complexities by leveraging technological advancements such as blockchain and API (Application Programming Interface). Let us look at how FinTechs have leveraged these technologies to make cross-border payment quicker, cost-efficient and more transparent for global trade. 

APIs – for increased efficiency

API-enabled FinTech tools enhance transaction efficiency through seamless integration. It connects fintech platforms directly with payment networks, banks, compliance tools and forex services to automate the transaction. 

How does it benefit?

• Single interface and real-time transaction processing eliminate the complexity of time delays in cross-border payment and ensure speedy payment.
• It gets real-time foreign exchange rates from multiple forex services to ensure you get the best rate without any human intervention. 
• API-enabled payment systems eliminate the need for several intermediaries and give instant updates on transaction status. This reduces unnecessary costs, improves trust and enhances transparency in the payment process.
• Integration with compliance tools and risk management software for anti-money laundering and know-your-customer checks ensures the transactions comply with the regulations and laws applicable. 

Examples:

• Airwallex provides end-to-end cross-border payment solutions by integrating with various platforms. It also offers direct integration with platforms like Amazon, Shopify, etc.
• Stripe, offers an API-based unified platform and payment products for businesses of all sizes.
• Wise API provides real-time forex rates, integrates with business tools and automates payment.
• FinTechs also use KYC solution providers and risk management platforms like Trulioo and Fiserv for smooth API-enabled payments.

Blockchain Technology – for more transparency and faster transactions

FinTechs offer faster and cheaper cross-border payment solutions by dodging the traditional payment system by leveraging blockchain technology that uses smart contracts, stablecoins and distributed ledger. 

How does it benefit?

• Payments rely on a distributed ledger that processes the transactions quickly, ensuring almost instant settlement. 
• Regulated stablecoins ensure instant dollar settlements across the globe.
• Its decentralised network lowers the transaction cost. FinTechs having their own blockchain payment networks offer efficient cross-border transfers at low cost.
• Smart contracts automate the payment eliminating the need for manual transaction processing.

Examples

• Ripple, a California-based FinTech, uses blockchain for cross-border payments on a real-time basis. Many commercial platforms and banks use their RippleNet platform for cross-border payments. Ripple’s XRP ledger stablecoins (Ripple USD) enables faster, cheaper and more transparent payments across borders.
• Circle offers near-instant settlement of cross-border payments for businesses at lower cost with its stablecoin – USDC (digital dollar).
• Stellar enables instant global transfers via its decentralised public blockchain payment network and it gives developers a tool to create. FinTechs use this platform to facilitate low-cost and faster cross-border payments and digital asset transfers. 

Digital Wallets – for seamless business payments

Digital wallets mainly allow seamless business (B2B) payments. They store, convert and transfer multiple currencies in no time without relying on the traditional banking system. 

How does it benefit?

• It bypasses multiple layers in the transfer process, such as bank intermediaries, which saves time and enables same-day processing of payment. Real-time forex rate reduces the cost involved in conversion.
• Management of multiple currencies offers flexibility.

Example:

• Payoneer offers multi-currency accounts and digital wallets for businesses enabling them to make global payments faster at low cost with real-time currency conversion.
• Revolut and Wise also allow global accounts that give flexibility for businesses to hold, convert and transfer multiple currencies with real-time exchange rates at minimal cost. 

Real-Time Payment Networks – for faster payment 

RTP or real-time payment network enables near-instant cross-border payments by streamlining the entire process. This includes eliminating the intermediaries, reducing the cost and bringing down the settlement timeline. 

How does it benefit?

• RTP network’s round-the-clock settlement ensures instant payment transactions with enhanced security.
• It ensures automated compliance and transparency in fees. 

Examples:

• Visa Direct helps businesses carry out cross-border payments in real-time to digital wallets and bank accounts globally. 
• NIUM and Thunes are well-known FinTechs globally that offer real-time payment network infrastructure for cross-border payments.

Embedded Finance – for instant payments within the business ecosystem

Embedded finance ensures seamless payment within the business ecosystem by integrating financial services directly onto non-financial platforms. 

How does it benefit?

• As businesses can directly embed the payments into their platform, it boosts efficiency by automating the transaction. 
• No involvement of third-party banks and intermediaries saves the cost and enhances transparency. 
• As businesses can offer multiple payment options for customers, it can enhance customer experience and improve global reach. 

Example:

• Airwallex and Stripe Treasury offer embedded finance or global payment networks for businesses to carry out seamless cross-border transactions.

Conclusion

To sum up, FinTech innovation in the cross-border payment landscape is helping seamlessly navigate the complexities of the traditional payment system. A combination of newer technologies adopted by FinTechs, such as APIs, blockchain, real-time payment networks, digital wallets and embedded finance, is making cross-border transactions faster, cheaper, secure and more transparent. 

Global businesses are turning to FinTechs as they offer flexibility to tailor their payment solutions based on their business needs, manage multi-currency transactions at lower cost and automate payments to get a smooth trade experience.