In today’s increasingly interconnected world, cross-border commerce is no longer a fringe activity confined to multinationals. Small- to medium-sized businesses (SMBs), startups and even freelancers are now part of the global marketplace, engaging in transactions that span continents and currencies.

They aren’t doing it alone. As international transactions accelerate, technological innovations, particularly those in artificial intelligence and blockchain, are helping make business borderless.

News from this week illustrates the ways that a leaner, more efficient and more transparent cross-border experience is top of mind for growing businesses.

Amazon, for instance, is adding a fully managed global supply chain option to its lineup of supply chain services for sellers by the end of the year. Meanwhile, the Bank for International Settlements recruited J.P. Morgan Chase, Deutsche Bank, UBS, Visa and Mastercard for a blockchain-based cross-border payments pilot. And Apple is bringing its Apple Intelligence services, including AI translation, to more languages.

These technologies, alongside in-step advances in the payments sector, such as accounts payable (AP) and accounts receivable (AR) automation, are not only reducing the complexities and costs associated with international transactions but also opening up new opportunities for businesses to engage in the global marketplace.

Read also: Cross-Border Payments Cost Could Be Cut by Blockchain, If It Can Only Solve the Scale Problem

Breaking Down Traditional Barriers With Innovation

From AI translators that facilitate communication between international partners to blockchain technologies like smart contracts and tokenized payments that streamline and secure financial processes, the landscape of global commerce is evolving.

Historically, a handful of dominant correspondent banks have been at the center of the cross-border payments market, with little competition — and little innovation — to be had. For small businesses, this operational backdrop made expanding and gaining market share internationally a daunting exercise.

Handling multiple currencies is one of the more cumbersome tasks for businesses engaged in cross-border commerce. Traditional systems for managing AP and AR often involve manual processes, are prone to errors and can be slow in adapting to currency fluctuations. This is especially problematic for SMBs that lack the resources for sophisticated financial departments.

However, ongoing and increasingly powerful advances in payments automation, robotic process automation (RPA) and AI hold the potential to automate currency conversions, ensure compliance with local tax regulations and optimize payment schedules based on currency exchange rates.

For example, next-generation payments systems can automatically match invoices to payments, reconcile financial discrepancies, and flag unusual activity that might suggest fraud or payment errors. This allows companies to reduce their reliance on manual reconciliation, which not only saves time but also enhances accuracy and financial control.

The ability to process payments and receive revenues in multiple currencies without expensive third-party intermediaries enables businesses to operate more cost-effectively.

As the PYMNTS Intelligence report “Cross-Border Sales and the Challenge of Failed Payments” revealed, faulty cross-border payments cost U.S. merchants at least $3.8 billion in sales last year.

Still, ensuring that these systems are transparent, reliable and secure is crucial for businesses to fully benefit from them.

Simplifying Financial Complexities and Unlocking Working Capital

Cryptocurrencies, long viewed with skepticism in mainstream finance, are increasingly being considered as a viable payment method in cross-border commerce. The adoption of blockchain technology and stablecoins — cryptocurrencies pegged to a stable asset, such as the U.S. dollar — has mitigated much of the volatility that initially deterred businesses from embracing the sector’s solutions.

The PYMNTS Intelligence report “Can Blockchain Solve the Cross-Border Payments Puzzle?” explored how blockchain could revolutionize cross-border payments, assessed its current adoption and examined the future implications for financial institutions and businesses.

The report found that for businesses, cryptocurrencies offer several advantages, particularly in cross-border transactions. Traditional payment methods, such as wire transfers or credit card payments, can take days to process and incur hefty fees, especially when currency conversions are involved. Embracing cross-border blockchain solutions, by contrast, enables near-instantaneous transactions at a fraction of the cost, making them particularly attractive for businesses that operate in countries with unstable currencies or high inflation.

Still, concerns around blockchain’s regulatory uncertainty, especially cryptocurrency payments and the use of blockchain in legal agreements, remain a risk to be mitigated. Different countries have varying regulatory frameworks, and navigating this patchwork of rules can be daunting for businesses.

One of the more immediate challenges in cross-border commerce is language. Whether it’s communicating with suppliers, negotiating contracts or navigating foreign regulations, the language barrier can slow down or even derail transactions. While human translators have long been a solution, the rise of AI-powered translation tools is increasingly offering businesses a faster and more scalable option.

As AI and blockchain evolve, their combined potential will likely lead to even more sophisticated and seamless cross-border solutions. For companies willing to embrace these innovations, the future of global commerce could have immense promise — as long as it is unlocked responsibly.

For all PYMNTS digital transformation, AI and B2B coverage, subscribe to the daily Digital Transformation, AI and B2B Newsletters.

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As Bloomberg News reported Wednesday (Sept. 18), the Bank for International Settlements (BIS) has recruited the likes of JPMorgan Chase, Deutsche Bank, UBS, Visa and Mastercard for its Agora project.

That project, first announced in May, explores the development of an international tokenized asset trading platform that would use digital currencies backed by the central banks. It would let investors trade across borders using “virtually risk-free central-bank money,” the report adds.

“Given the high level of interest in Project Agora and its large scale, the BIS chose to work with the Institute of International Finance to convene the private sector participants,” project lead Morten Bech told Bloomberg. “This collaboration was very helpful in being able to complete the selection and onboarding process in a timely manner.”

According to the report, Agora is the largest and most complex effort out of a number of projects BIS is exploring for enhancing the world’s financial system.

It “has the potential to lay the foundation for a new regulated financial market infrastructure to facilitate cross-border payments,” the BIS said on its website. “This is about improving, via technology, what central and commercial banks already do today and enabling greater speed and efficiency.”

Writing about this topic last week, PYMNTS noted that cross-border payments are hampered by inefficiencies like high fees, slow settlement times and poor transparency, making international transactions cumbersome and expensive.

For instance, consumer cross-border payments often incur bank fees averaging more than 11%, which can eat away at the value of smaller transactions. B2B payments are affected as well, with fees averaging 1.5% and processing delays up to several weeks. Almost half of Citibank’s corporate clients say high costs are a pain point, while 59% cite slow speeds as an issue.

“The lack of transparency in traditional payment systems worsens existing challenges. In 2023, U.S. eCommerce firms experienced an 11% failure rate in cross-border transactions, resulting in $3.8 billion in lost sales,” PYMNTS wrote.

Pinpointing the root cause of failure can be difficult, thus impeding recovery efforts and erasing customer trust, and underlining the need for a more efficient and transparent payment solution.

“Blockchain technology offers transformative potential to address these issues by streamlining processes and reducing costs,” that report said.

The PYMNTS Intelligence report “Can Blockchain Solve the Cross-Border Payments Puzzle?” examined how blockchain could transform cross-border payments, while also assessing its current adoption and exploring the future implications for financial institutions and businesses.

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The British FinTech has submitted applications to become an electronic-money institution and offer remittances in the United Arab Emirates (UAE) and is seeking ways to expand in Saudi Arabia, Bloomberg reported Friday (Sept. 13), citing unnamed sources.

The company also plans to hire a head of finance to join its existing team in the UAE, a head of legal for the region, and staffers for a variety of roles in Dubai, the report said, citing published job listings.

Reached by PYMNTS, Revolut declined to comment on the report.

The FinTech company has 9 million customers in the United Kingdom and has been working to grow in other countries, according to the report. In recent months, Revolut began operating in Mexico, Brazil and New Zealand. It also plans to expand in India.

Revolut CEO Nik Storonsky said at the Dubai Fintech Summit in May, per the report: “We want to build a truly global bank.”

The company said in July that it doubled its revenue last year — boosting it from $1.1 billion in 2022 to $2.2 billion in 2023 — and added 12 million new customers, bringing the total to 45 million as of June 2024.

Storonsky said at the time of the release of Revolut’s 2023 annual report that the company is committed to “bringing the Revolut app to new markets and customers around the world.”

In August, Revolut Business expanded the availability of its “borderless financial super app for businesses” to Singapore and said it is looking to add other markets. In a post on LinkedIn that announced the news, the company asked: “Where should we launch next?”

Also in August, Revolut and Visa said they formed a cross-border business payments pact that allows instant card transfers for Revolut’s business customers via the Visa Direct system.

The two companies also collaborated in 2023 to offer card transfers powered by Visa Direct for peer-to-peer payments to roughly 90 countries, and launched a series of virtual cards for business focused on the B2B travel sector earlier this year.

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The payments company offered the update as part of Stripe Tour Singapore, its annual product showcase for the region, according to a Wednesday (Aug. 28) press release.

“Building on that momentum, we’re equipping businesses with tools to accelerate their revenue growth, including an optimized checkout suite, the ability to show local prices to customers, and advanced fraud prevention tools,” Sarita Singh, regional head and managing director for Southeast Asia, India and Greater China at Stripe, said in the release. “This will help Asian businesses to boost their revenue.”

Among the tools is Stripe’s optimized checkout suite, which lets businesses create a “high-performing checkout flow” and now uses artificial intelligence to determine which payment methods to show for a given customer. Merchants can also run no-code A/B tests for payment methods, which is an industry first, available only from its service, per the release.

“These features complement Stripe’s new Adaptive Pricing feature, which localizes prices across 150 markets … allowing customers to pay in their local currency,” the release said. “Adaptive Pricing removes the need for businesses to manually price in multiple currencies and keep up with fluctuating exchange rates.”

Stripe’s test of the effectiveness of Adaptive Pricing in the United States, the United Kingdom, Canada and the European Union showed that it led to an average 17.8% increase in cross-border revenue for businesses. The test also found that 90% of customers checked out in their local currency when given the option.

Offering people more choices when it comes time to check out can help build relationships with consumers, according to the PYMNTS Intelligence report “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers.” The report found that 16% of consumers pointed to the ability to use their preferred payment methods as a factor determining their decision on where to make their most recent purchase.

“Whatever calculus the user performs to determine the payment methods that they want to use, they want more options across more merchants,” Drew Olson, senior director at Google Pay, told PYMNTS in December.

Meanwhile, Stripe also noted Wednesday that it is seeing an expectation among consumers in Asia for cross-border commerce to improve their shopping experience, citing company research showing that 67% of consumers in Singapore expect that by 2030, merchant location will factor less into their shopping decisions.

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This collaboration will enable the small and medium-sized businesses (SMBs) using Skydo’s cross-border payments platform to offer their buyers in the United Kingdom and the European Union a broader range of local payment options, the companies said in a Thursday (Aug. 22) press release.

“We are constantly in search of global rails that make payments faster, cheaper and more compliant and Banking Circle fits seamlessly with this objective,” Srivatsan Sridhar, co-founder and CEO of Skydo, said in the release. “By leveraging Banking Circle’s global network, we can help more and more Indian businesses expand their operations globally.”

Skydo’s platform is focused on international payments and provides a flat-fee pricing model, real-time exchange rates and zero processing fees, according to the release. It allows Indian SMBs to save as much as 80% on foreign exchange transaction costs.

Banking Circle, which is a fully licensed next-generation bank with central bank access, is committed to governance, compliance and lowering the costs associated with global payments, the release said.

The partnership of the two companies provides Skydo with a direct banking partner and a single application programming interface (API) integration to Banking Circle’s infrastructure, allowing Skydo to offer its customers more options when it comes to local payments and fund collection, per the release.

“By leveraging Banking Circle’s virtual accounts as well as our local and cross-border payment rails, Skydo can streamline the payment process for its clients, reducing both costs and transaction times and opening new, exciting markets,” Mishal Ruparel, chief commercial officer at Banking Circle, said in the release.

Cross-border payments are undergoing a revolution as global trade soars, according to the PYMNTS Intelligence and Citi collaboration, “The Treasury Management Playbook: Spotlight on Cross-Border Payments.”

The more a business looks abroad for new markets and customers, the more important it is that they operate with seamless and efficient cross-border payment solutions, the report said.

In another collaboration announced Thursday, Bank of New York Mellon (BNY) and Commonwealth Bank of Australia (CBA) launched a cross-border payments partnership that lets businesses and individuals who receive international payments from BNY customers get paid in as little as 60 seconds, no matter who they bank with.

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The collaboration lets businesses and individuals who receive international payments from BNY customers get paid in as little as 60 seconds, no matter who they bank with, according to a Thursday (Aug. 22) press release.

“Through the new arrangement, BNY commercial payments from overseas to businesses and individuals with Australian bank accounts will now be available to the final beneficiary in under a minute, 24 hours a day, seven days a week,” the release said.

The partnership uses Australia’s New Payments Platform (NPP) International Payments Service (IPS), allowing the last mile of BNY’s cross-border payments to Australia to be processed by CBA.

“Making and receiving cross-border payments can be challenging for customers due to the cost and processing times,” the release said. “Inefficient payment processes also have the potential to hinder economic growth by impeding the flow of capital across borders.”

PYMNTS examined the Australian payments landscape earlier this year in a conversation with Juan Franco, senior vice president of eCommerce for the Asia-Pacific (APAC) region at Nuvei, who noted the country has been at the forefront of payments innovation.

The country’s eCommerce market is notable in the APAC region for its maturity, substantial market size, and early adoption of payment methods such as buy now, pay later (BNPL).

For eCommerce merchants looking to break into the market, Franco underlined the importance of acknowledging its distinctive payments landscape, which includes BNPL along with traditional card payments, electronic fund transfer (EFT) payments, and a range of digital wallets.

An early adopter of contactless payments, Australia has also joined the faster payments trend, debuting the NPP in 2018 to let consumers and businesses make near real-time payments.

However, Franco said the speed and adoption of instant payments in Australia will differ from the growth witnessed in countries like Brazil and India, where the Pix and UPI payment systems have opened instant payments for large swaths of unbanked populations previously blocked from electronic transactions.

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The five wallet operators participating in the new Wallet Interoperability Council include Airtel, bKash, MPESA, Nequi and Sama Money, according to a Tuesday (Aug. 20) press release.

Together, these operators serve millions of wallet users in Bangladesh, Colombia, Kenya, Senegal, Tanzania and Uganda, the release said.

As members of the new council, they will use TerraPay’s technology to facilitate the expansion of these wallets from local payment solutions to global ones, per the release.

“The formation of this council marks a significant milestone in our mission to provide innovative and inclusive financial solutions,” TerraPay CEO Ambar Sur said in the release. “Collectively we will empower millions of individuals to participate in the global economy.”

The digital wallet operators will work with each other and with TerraPay to accelerate the adoption of digital wallets and financial platforms as well as enhance the cross-border payment experience they deliver, while also retaining their independence, according to the release.

With expanded capabilities, they aim to streamline cross-border transactions such as merchant payments and international remittances, the release said.

In addition to providing the technology infrastructure, TerraPay will handle clearing and settlement processes, per the release.

“We have a huge respect and admiration for our founding partners, and we are committed to driving the next wave of wallet evolution, bringing the local user experience to the global scale,” Sur said in the release.

The continued emergence of digital wallets and peer-to-peer (P2P) offerings is reshaping the global remittance market, PYMNTS reported in May 2023.

Reducing the cost of cross-border remittances can unlock new use cases for cross-border services, TerraPay Chief Operating Officer Ram Sundaram told PYMNTS in an interview posted in July.

Transactions are the most common use of digital wallet technology, according to the PYMNTS Intelligence report “Digital Wallets Beyond Financial Transactions: A Global Perspective,” which was based on a survey of more than 12,000 consumers across the United States, the United Kingdom, Brazil, France and Germany.

Forty-one percent of consumers said they would likely use digital wallets to carry out financial transactions in the next year, and 40% said the same for storing and accessing payment methods, according to the report.

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The collaboration, announced Wednesday (Aug. 14), combines Finzly’s foreign exchange (FX) payment platform and Corpay Cross-Border’s real-time FX rates, giving financial institutions and their business clients access to FX transaction capabilities integrated with many payment rails.

“Businesses that need to send and receive international payments commonly use multiple siloed banking systems to make these transactions,” Finzly said in a news release. “This tends to increase the complexity and the need for manual redundant processing. As a result, these transactions can be error-prone and slow to complete.”

By integrating the two companies’ tech, international payments processing can be more automated, and seamlessly integrated with other domestic accounts and payment rails, the release added, with Finzly’s unified API making it easy to send international payments via Swift.

“Together we are bringing to market a modular FX solution with excellent synergies that allows banks of all sizes to compete with large global banks, provide competitive FX rates and superior customer experience in international payments,” said Booshan Rengachari, Finzly’s founder and chief executive.

“Additionally, real-time FX rates can help financial institutions to manage and mitigate FX risk more effectively.”

Corpay said earlier this month that it was pursuing different projects in different regions as it works to grow its fleet payments business.

During the second quarter, the corporate payments company’s international fleet business performed “exceptionally well,” while its North American fleet business “presented a drag on growth,” Corpay CEO Ron Clarke said during an earnings call last week.

The international fleet segment reached low double-digit growth in both Australia and the United Kingdom, while Brazil saw “extremely strong” revenue growth of 20%, Corpay Chief Financial Officer Tom Panther said during the call.

In all, the company’s vehicle payments segment saw 5% revenue growth during the quarter, compared to a year earlier, according to a Wednesday earnings release.

And in June, the company announced it was acquiring business-to-business cross-border/treasury management firm GPS Capital Markets, a deal that will eventually allow it to process cross-border payments for around 23,000 customers in more than 145 currencies on six continents.

Corpay had called FLEETCOR Technologies until March of this year, when it rebranded to its newer and simpler name. The company later said it was focused on building a “narrower, simpler company that we can manage and compound.”

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To that end, Wise plans to begin signing up new customers in the world’s most populous nation after pausing that side of its business in the country, company officials told Bloomberg News Monday (Aug. 12).

Wise, based in London, ceased taking new customers in the past months as it upgraded its infrastructure. This was in response to the company being awarded a license from the Reserve Bank of India (RBI) that lets the app’s customers send more money overseas.

Now, Wise will begin signing up new customers in the next few months, Shrawan Saraogi, Asia Pacific head of expansion at Wise, said in an interview with Bloomberg.

“India is a huge market for remittance,” Saraogi said. “We will be primarily focusing on cross-border movement that’s currently almost entirely done by banks.”

The report cites data from the RBI showing that people in India sent $32 billion to other countries — mostly for travel, education and family expenses — in the year leading up to March 2024. That’s up from $27 billion a year earlier.

Wise in June said it was increasing its investment in its payments infrastructure, a cost that the company is wagering will let it cut fees by making payments processing more efficient.

Kingsley Kemish, the group’s interim chief financial officer, argued during an earnings call that the investment would help Wise to achieve its long-term goal of becoming a global leader in the cross-border payments sector.

As covered here earlier this year, there are a number of challenges that hinder the wider use of cross-border payments, including transaction fees, exchange rates and security concerns, all of which have the potential to deter customers and harm revenue growth.

Illustrating the troubles with this sector, the PYMNTS Intelligence in the report “Cross-Border Sales and the Challenge of Failed Payments,” a collaboration with Nuvei, found that in the year alone prior to the report, American merchants suffered at least $3.8 billion in lost revenue from failed cross-border payments.

“Cross-border payments inherently have more points of failure compared to domestic payments,” Citi Global Co-head of Payments and Receivables, Treasury and Trade Solutions (TTS) Amit Agarwal told PYMNTS in an interview late last year.

To bring down these higher failed-payment rates, businesses looking to expand internationally should bolster their collaboration with their payment service providers (PSPs). The report found that this can offer merchants access to advanced tools and expertise that allow for efficient and reliable cross-border transactions.

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Bank Indonesia, the country’s central bank, has granted the company a payment system service provider license, allowing it to facilitate domestic and cross-border payments in the world’s fourth most populous country, PingPong said Wednesday (July 31).

“As one of the largest and fastest growing economies in Southeast Asia, Indonesia offers an incredible opportunity for enterprises scaling their operations globally,” David Messenger, CEO of global businesses at PingPong, said in a news release. “This license enables us to expand our reach and provide enterprises with end-to-end, one-stop cross-border payment solutions.”

Indonesia, the release noted, has a significant consumer market, with its gross domestic product expected to hit $1.5 trillion this year. The country’s young population and large labor force have made it one of the fastest growing nations in Southeast Asia, and an increasingly crucial country for companies that want to expand their global footprint, PingPong said.

“For businesses focussing on international trade, this license will help them expand and gain access to the region’s $320 billion export market,” the company said.

PingPong already holds more than 60 payment licenses and permits around the world, including in the United States, EU, U.K., Hong Kong and mainland China.

In other news from the cross-border payments space, PYMNTS discussed the importance of lowering the cost of these payments last week in an interview with Ram Sundaram, COO at TerraPay, during a discussion for the series “What’s Next in Payments: The Halftime Report.”

The World Bank’s Sustainable Development Goals (SDGs) call for a reduction in the cost of cross-border remittances, which now stands at around 8%, underlining the importance of cost reduction as an innovation pillar within the payments field.

Sundaram said that his company’s mission is in line with this goal, aiming to reduce these costs further to allow for low-value transactions with prohibitive fees. These lower costs can unlock new use cases for cross-border services, he added, thus expanding revenue streams for financial institutions and service providers.

“If you do a $10 transaction today, you’ll probably spend a very significant part of that $10 as fees,” Sundaram said. “And we need to get to a point where that base fee is something that you don’t have to think about, so that you can do low-value transactions at scale — that could change the landscape of cross-border payments and remittances.”

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