The global economy is always shifting, shaped by expansion and contraction, supply and demand, innovation and technological advancement. Big picture policy and engagement take the daily headlines as “superpowers” and politicians vie for this week’s geopolitical soundbite.
In parallel, the payments industry acts as a barometer, following global commerce transformation in real time, demonstrated by how it affects the individual all the way up to global corporates and every financial institution in between.
Global trade is now for everyone, and this includes the traditional emerging markets. How we communicate and provide goods and services in a modern digitized economy is enabling all business types everywhere. The way we move money across borders has to follow the same path, driven by such e-commerce platforms, remote work and digital marketplaces. Africa, Southeast Asia and Latin America are no longer peripheral — they are growth engines. Yet these markets have often been expensive or difficult to pay into. Businesses want simpler access.
Breakthroughs in money movement have been evident for some time in the remittance / C2C market. A hugely competitive space and key for so many countries around the world economically, hundreds of billions of dollars demanded change from the global diaspora of emerging markets. Traditional remittance services were expensive and slow, so fintech innovators stepped in with app-based models offering real-time exchange rates, visibility on fees and near-instant delivery into bank accounts or mobile wallets.
The B2B market
It is only natural that the next stage of innovation is to bring the same enhancements to the B2B market.
In today’s global economy, businesses have access to the building blocks for success like never before, for example automated treasury, integrated accounting, digital invoicing and embedded compliance, collectively enabling speed to market.
But if the way money moves, which underpins all of this activity, does not operate at the same velocity, trade inevitably slows. When payments lag behind, friction creeps into the system, and even the most advanced processes begin to feel constrained.
Cross-border payments typically point the finger at legacy correspondent banking processes.
Banks don’t hold accounts with each other directly; even the largest banks cannot be considered truly global with an account in each country. Intermediary banks, agency banks and other partners fill the gap to “pass along” payments to in-country or end-beneficiary institutions. A single transaction might move through three or four banks before reaching its destination.
This is the way international payments have been made for a long time and it “worked.” Like any layered system, it only takes one stage not operating at its optimal level and the whole flow is exposed and suddenly looks very cumbersome.
Timing and delays are glaringly obvious as the main side effects. The handling of payment information — how it’s collected, managed and moved to the next bank — is typically a manual process and so is exposed to a litany of potential delays. This is all carried out in the context of trading and settlement hours for that institution and geography.
Every process here carries cost, even more so if it’s manual. The “intermediary” handling fee has left many an importer/exporter smarting from deductions where, in most cases, you have no control over the size that is charged.
Visibility is a simple but perpetual problem: once money is sent, where is it? Who has it? Has it been paid, and by which bank? This layered payment process asks these questions throughout until the end beneficiary account is finally credited.
Compliance is also a necessary overlay. AML and KYC standards can be misinterpreted as slowing the pace of business when, in fact, effective implementation and standards actually support efficient movement of money. These checks are necessary to prevent financial crime, but they add time and complexity, especially when sending funds into emerging markets.
When you consider these factors for large corporates, managing this system requires dedicated treasury teams. For small and medium-sized enterprises (SMEs), it can be a major barrier to global expansion.
Addressing the issues
There is no single remedy, but fintech modernization does actively address the three main causes of friction. The market is taking on these issues progressively while keeping pace with demand. Each layer and sequence is being redesigned in an evolutionary process.
Blockchain-based rails grab the headlines and it does touch the three key areas of friction. They enable near-instant transfers, operate 24/7, reduce reliance on intermediaries and provide transparency of where the money is. It is not a wholesale replacement of banking infrastructure, but it introduces a faster alternative settlement layer using stablecoins.
The further benefit to cash management relieves the pressure on treasury teams and funding requirements for FIs to front-run capital to meet payment speed demand. This isn’t always stablecoin-dependent, as automated treasury systems for cash management ensure money is where it needs to be ahead of time and used efficiently.
Real-time domestic payment networks are now commonplace. Many countries now move money instantly within their borders; this is very much expected in developed economies and those refined by mature remittance markets.
The next step is linking these systems internationally. Rather than routing payments through multiple correspondent banks, modern platforms connect directly into local instant rails, shortening settlement times dramatically. The capability is already there; scaling global interoperability is the next challenge.
Many FIs and platforms are trying to combine these advancements as a collective product offering, with a single integration providing a dashboard of capabilities to enhance how businesses deal with the challenges of cross-border payments.
Building modern digital ecosystems centred on mobile money and real-time domestic rails is something we have seen for some time in emerging markets. Established providers are now connecting directly into these local systems rather than relying on long correspondent banking chains.
The result is lower costs and simpler access for businesses trading into these markets. As more emerging market–based SMEs gain the confidence to operate across borders, it becomes increasingly clear that so-called “developing markets” are not just participants in payment innovation — they are driving it.
Despite technology providing the platform for global B2B payments to move towards instant capability, true worldwide real-time settlement is not yet a reality. FinTechs, Banks, APIs and blockchain infrastructure can reduce friction, but we are still operating within a fragmented system of money movement, even with central banks across the globe committed to modernization.
A huge leap forward can be achieved by unifying regulatory standards, alongside a recognition framework that allows technology to connect systems effectively across borders.
Governments and regulators are pivotal, execution of policy remains a critical overlay to achieving instant global payments.