{"id":21369,"date":"2025-04-30T20:57:41","date_gmt":"2025-04-30T19:57:41","guid":{"rendered":"https:\/\/www.equalexperts.com\/?p=21369"},"modified":"2025-06-18T10:23:56","modified_gmt":"2025-06-18T09:23:56","slug":"cross-border-payments-its-not-just-about-technology-but-it-starts-there","status":"publish","type":"post","link":"https:\/\/www.equalexperts.com\/blog\/our-thinking\/cross-border-payments-its-not-just-about-technology-but-it-starts-there\/","title":{"rendered":"Cross-border payments: It\u2019s not just about technology – but it starts there"},"content":{"rendered":"

It\u2019s often said that the world is getting smaller. Advancements in technology, logistics and communications have dramatically reduced the barriers between countries, enabling businesses to operate at a truly global scale.\u00a0<\/span><\/p>\n

Cross-border payments are a prime example. Offering businesses a chance to unlock new revenue, streamline operations, and improve the customer experience internationally, it\u2019s no surprise that the sector is booming. Valued at $190 billion USD in 2023 and forecast to <\/span>reach $392 billion by 2033<\/span><\/a>, cross-border payments represent a major growth opportunity.\u00a0<\/span><\/p>\n

Whether you\u2019re a retailer expanding into new international markets, a travel provider catering to global customers or a digital product with a worldwide user base, seamless cross-border payments are becoming fundamental in day-to-day business.<\/span><\/p>\n

But behind every successful cross-border transaction lies a complex web of different currencies, regulations, tax implications, and infrastructure demands. Navigating this landscape requires modern, flexible, compliant and cost-effective technology foundations that don\u2019t compromise on performance, stability or user experience.<\/span><\/p>\n

Cross-border payments: The future of global business<\/b><\/h2>\n

With so many industries now able to operate on an international scale, cross-border payments are becoming increasingly vital for businesses looking to expand their reach or remain competitive, offering numerous benefits.<\/span><\/p>\n

1. Unlocking new revenue streams<\/b><\/h3>\n

Customers expect to see familiar payment methods and local currency options. Research shows that <\/span>59% of shoppers will abandon their online shopping cart<\/span><\/a> if the checkout experience doesn\u2019t provide purchase information in their local language, currency or preferred payment method. Offering local currencies or region-specific payment methods, such as AliPay in China or iDEAL in the Netherlands, is essential when tapping into new markets.\u00a0<\/span><\/p>\n

\"Future-proof<\/a><\/center> <\/p>\n

2. Enhancing customer experience<\/b><\/h3>\n

Alongside the ability to use familiar payment methods, a seamless, localised checkout experience builds trust and confidence. Customers also expect transparency around fees, real-time currency conversion and full visibility of taxes and duties before paying. Around <\/span>one in six (17%) site visitors will abandon their cart<\/span><\/a> if they can\u2019t calculate the total order cost upfront. Organisations that meet these expectations and provide an enhanced customer experience are more likely to convert first-time buyers into loyal international customers.\u00a0<\/span><\/p>\n

3. Streamlining operations and optimising costs<\/b><\/h3>\n

Well-implemented and efficient cross-border payment systems can minimise transaction fees, optimise exchange rates and create cost-effective payment routes. Automating and streamlining processes to reduce manual errors can help businesses scale international operations without incurring significant cost or compliance risk – especially when coupled with a strong data foundation and internal ways of working.\u00a0<\/span><\/p>\n

Technical foundations: Best practices for implementing cross-border payments<\/b><\/h2>\n

Delivering <\/span>modern cross-border payments<\/span><\/a> requires robust and adaptable technical foundations. For engineering and architecture teams, the challenge is to scale with complexity without sacrificing performance, compliance or user experience.\u00a0<\/span><\/p>\n

Overcoming legacy system limitations\u00a0<\/b><\/h3>\n

Legacy payment systems are often built around local, domestic markets, supporting limited currency and payment methods in rigid, inflexible monoliths. With little ability to handle real-time exchange rates, complex reconciliation needs and region-specific tax and compliance requirements, they are simply not designed for the level of intricacy and complexity required for modern payments.\u00a0\u00a0<\/span><\/p>\n

Introducing cross-border capabilities at scale demands a shift to a robust, modular approach.\u00a0 Utilising microservices-based architecture and headless or API-first approaches enables businesses to seamlessly add new and best-in-breed payment features to support secure and effective cross-border transactions, continuously adapting to changing markets, regulatory shifts and evolving customer needs.\u00a0<\/span><\/p>\n

Interoperability<\/b><\/h3>\n

Interoperability is vital as different financial systems, platforms, and institutions across numerous jurisdictions need to work together and exchange data efficiently and accurately. Merchants need to ensure that no matter how a customer chooses to pay – their payment platforms can accept and process it without running into technical or data-format issues.\u00a0<\/span><\/p>\n

Adopting standardised messaging protocols, such as ISO 20022, an open global standard for financial information, can help improve interoperability. These protocols define a common language and structure for payment data, making it easier for systems across different banks, countries, and payment networks to understand and process transactions in the same way. This can help improve data exchange consistency, reduce errors and delays and enable better regulatory compliance.<\/span><\/p>\n

Security<\/b><\/h3>\n

Implementing a “Security-First” principle in payment platform development involves embedding security considerations at every stage of the system’s lifecycle. This approach encompasses robust authentication mechanisms, such as multi-factor authentication (MFA), to ensure that only authorised users can access the system.\u00a0<\/span><\/p>\n

Data protection is paramount, involving encryption of sensitive information both at rest and in transit, as well as tokenisation to replace sensitive data with non-sensitive equivalents. Regular security audits, incident response planning, and user education further fortify the platform against evolving threats. Read our blog for more information about <\/span>proactive fraud prevention in payment systems<\/span><\/a>.<\/span><\/p>\n

Real-time currency and exchange rate management<\/b><\/h3>\n

Supporting multiple currencies isn\u2019t as simple as just adding additional dropdowns at checkout. It affects how systems handle pricing, invoicing, and reconciliation across the entire payment stack. Before implementing cross-border transactions, merchants need to define what currencies they wish to support and why. Organisations can use data to identify high-performing markets and customer preferences to make informed decisions for long-term business value.\u00a0<\/span><\/p>\n

Once defined, systems need to pull accurate exchange rates in real-time, for example, through services like Open Exchange Rates, and reflect these accurately and consistently across customer interfaces and backend financial systems.<\/span><\/p>\n

Managing settlement, reconciliation and treasury<\/b><\/h3>\n

Cross-border transactions introduce more complex flows around settlement timelines, reconciliation across borders or time zones, and managing foreign currency balances.\u00a0 Engineering teams must ensure that payment systems can effectively handle delayed settlement timelines, fluctuations in currency values and exchange rate fees, as accurate financial reporting depends on this.<\/span><\/p>\n

Compliance, regional regulatory adherence and payment preferences<\/b><\/h3>\n

Operating in different currencies and counties will involve varying regulatory requirements concerning data privacy, taxation and financial reporting. Payment systems need to be equipped from the outset to comply with these diverse regulatory landscapes alongside local payment preferences.<\/span><\/p>\n

Established third-party cross-border payment providers such as PPRO, Stripe, Braintree, or Adyen can offer a solution, providing expertise, regional connections, and tailored solutions to scale payments globally.\u00a0 Rather than building everything in-house, these platforms can help simplify the integration of local payment methods, automate regional tax calculations or VAT compliance, and reduce the need for internal expertise – speeding up time to market for new regions.<\/span><\/p>\n

\"Modern<\/a><\/center> <\/p>\n

Localising the customer checkout experience<\/b><\/h3>\n

Customers expect a checkout experience that is functional, familiar and easy to use. That means supporting local languages, regional address formats, local currency symbols and payment icons they recognise.\u00a0<\/span><\/p>\n

Responsive and user-friendly designs that cater to various devices and screen sizes are also vital to accommodate the diverse needs of a global audience. By prioritising these elements, businesses can reduce friction and create a checkout experience that resonates with users, no matter where they are, which can often be the difference between a completed sale and an abandoned cart.<\/span><\/p>\n

The emergence of stablecoins in cross-border payments<\/b><\/h2>\n

Future-ready cross-border payments begin with solid technology foundations including platform thinking, API-first architecture, and uncompromising security. With these in place, organisations are well-positioned to quickly adapt to emerging innovations, such as the rise of stablecoins.<\/span><\/p>\n

Stablecoins are digital assets whose value is pegged to that of another stable asset such as the US Dollar, Euro or commodity. Combining the benefits of blockchain technology with the stability of traditional fiat currencies, stablecoins can provide near-instantaneous settlement at reduced costs for merchants.\u00a0<\/span><\/p>\n

The theoretical potential of stablecoins for cross-border payments is starting to be realised as more industry leaders and financial institutions integrate them into their offerings. Recent announcements include:<\/span><\/p>\n