Quick answer
A cross-border payment moves money between people or firms in different countries, often through a chain of banks and a currency conversion. Each step adds cost and delay: sending a $200 remittance cost 6.36% of the amount on global average in Q3 2025[5].
Key points
- Cross-border payments often pass through several banks (correspondent banks), each adding time, checks and sometimes fees.
- The total cost has two parts: visible fees and the exchange-rate margin hidden in the rate you are offered.
- In Q3 2025 the global average cost of sending $200 was 6.36%; banks averaged 14.99% and digital services 4.59%.
- The G20 aims for remittances to cost no more than 3% on average by 2030, and in October 2025 the FSB said the 2027 targets were unlikely to be met globally.
- US law gives people sending money abroad the right to see the exchange rate and fees before paying, a 30-minute cancellation window and 180 days to report errors.
On this page
#What counts as a cross-border payment?
A cross-border payment is any payment where the payer and the payee are in different countries. It can be a worker sending money to family (a remittance), a shop buying stock from a foreign supplier, or a bank moving large sums for a client. The Financial Stability Board (FSB), which coordinates financial rules for the G20 group of major economies, splits these into three segments, wholesale (between financial institutions), retail (people and businesses) and remittances, and sets different goals for each[1].
Domestic payments run on one country's rails in one currency. Cross-border payments must connect two sets of rails, two sets of laws and usually two currencies. That is the root of most of the friction, and it is why domestic instant payments can be faster at home than abroad.
#How does money travel between countries?
Most banks do not hold accounts with every other bank in the world. Instead they rely on correspondent banking: a bank holds an account with a bank in another country and uses it to make and receive payments there. When there is no direct link, a payment may hop through one or more intermediary banks. Each bank sends instructions using messaging networks such as Swift, which now uses the ISO 20022 message standard for payment instructions[2].
A bank transfer abroad through correspondent banks
- Sender — pays in home currency
- Sender's bank — checks, converts or forwards
- Correspondent — intermediary bank(s)
- Recipient's bank — screens and credits
- Recipient — receives local currency
Speed has improved. In October 2025 the FSB reported that the global speed of wholesale payments had increased and that remittances were also arriving faster[3]. Tracking helps too: Swift says its gpi service shows banks the route, processing times and fees deducted along the way[4]. The last step into the recipient's account still depends on the local bank and its domestic rails.
#What does a cross-border payment really cost?
There are two kinds of cost. The fee is the amount you see. The exchange-rate margin is the gap between the rate you get and the mid-market rate, the midpoint between buying and selling prices. The World Bank's Remittance Prices Worldwide database measures both together as the total cost of sending $200[5]. In Q3 2025 the global average was 6.36%, with banks at 14.99% and money transfer operators at 4.72%; digital services averaged 4.59% against 7.30% for non-digital ones[5].
| Type of service | Average cost (% of $200) | Cost in dollars |
|---|---|---|
| Global average, all services | 6.36%[5] | $12.72 |
| Banks | 14.99%[5] | $29.98 |
| Money transfer operators | 4.72%[5] | $9.44 |
| Digital remittances | 4.59%[5] | $9.18 |
| Non-digital remittances | 7.30%[5] | $14.60 |
| G20 remittance target for 2030 | 3%[1] | $6.00 |
Dollar amounts are the percentage applied to $200, calculated with code. Averages vary widely by corridor (the pair of countries involved).
Worked example
Worked example: spotting a hidden exchange-rate markup
The rates here are made up for illustration. Say the mid-market rate is 1 USD = 0.92 EUR and a provider offers 0.90 plus a $5 fee to send $500. All figures calculated with code.
- What the recipient would get at the mid-market rate, no fee
- €460.00
- What the recipient gets: ($500 − $5 fee) × 0.90
- €445.50
- Exchange-rate markup: (0.92 − 0.90) ÷ 0.92
- about 2.17%
- Total shortfall versus mid-market
- €14.50
A provider advertising 'no fee' can still be expensive if its rate is poor, and the reverse is also true. You can test offers with our FX markup calculator.
#Why are cross-border payments slower and pricier than domestic ones?
The G20 programme names four challenges: cost, speed, access and transparency[1]. Long chains of correspondent banks, different operating hours and cut-off times, currency conversion and legal checks all play a part. Banks must screen payments against sanctions lists and follow anti-money-laundering rules in every country involved, which can hold a payment for review; see sanctions screening explained and AML explained.
#What is the G20 doing about it?
The G20 has endorsed a roadmap with quantitative targets, most of them for end-2027. For retail payments the goal is a global average cost of no more than 1%, with no corridor above 3%, and 75% of payments available to the recipient within one hour[1]. For remittances the cost goal is no more than 3% by 2030, with no corridor above 5%[1]. In October 2025 the FSB reported that satisfactory improvement at the global level was unlikely within the 2027 timetable, although some measures such as wholesale and remittance speed had improved[3].
#What rights do I have when I send money abroad?
Rules differ by country. In the US, a remittance transfer is an electronic transfer of more than $15 sent by a consumer in the United States to a person or company abroad[6]. Covered providers must disclose fees, the exchange rate and the amount to be delivered before you pay; you can cancel within 30 minutes at no charge unless the money has already been picked up or deposited; and you have 180 days from the promised delivery date to report an error[6]. Providers that make 500 or fewer transfers a year are exempt[6].
Common beginner mistakes with cross-border payments
Comparing only the fee
The exchange-rate margin can cost more than the fee. Compare the final amount received.
Assuming the bank is the cheapest option
In Q3 2025 banks were the most expensive provider type on average for $200 remittances[5]. Check the specific corridor.
Ignoring intermediary deductions
On some bank transfers an intermediary bank can deduct a charge (Swift lists fee deductions among the things its gpi tracking makes visible)[4], so ask who pays fees along the way.
Waiting too long to report a problem
Error rights have deadlines, such as 180 days for US remittance transfers[6].
The bottom line
Cross-border payments cost more and take longer because they cross banks, currencies, time zones and laws. The total cost is the fee plus the exchange-rate margin, and it varies hugely by provider and corridor. Global targets exist, but the FSB says progress is too slow, so comparing the amount received is still the best habit.
Frequently asked questions
What is a remittance?
Money that a person sends to someone in another country, often family. The World Bank tracks the cost of sending $200 in many country pairs[5].
Why did my recipient get less than I expected?
Usually because of the exchange-rate margin, a receiving-bank fee or an intermediary bank deduction. Ask for the guaranteed amount received before you pay.
How long should an international transfer take?
It varies by route and provider. The FSB reports that wholesale payments and remittances have become faster globally[3], but correspondent hops, cut-off times and local steps can add time.
Are stablecoins a way around these problems?
Some people use them, but they bring their own risks and rules. See our explainer on stablecoins before treating them as a substitute for regulated transfers.
Sources
- G20 Targets for Enhancing Cross-border Payments — Financial Stability Board, 2025 Primary
- Global financial community completes switch to ISO 20022 — Swift, 2025 Primary
- FSB calls for enhanced policy implementation to achieve tangible improvements in cross-border payments — Financial Stability Board, 2025 Primary
- Swift gpi — Swift, 2026
- Remittance Prices Worldwide — main report and annex, Q3 2025 — World Bank, 2025 Primary
- What is a remittance transfer and what are my rights? — Consumer Financial Protection Bureau, 2024 Primary
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