Best Practices for Managing Cross-Border Payments

Introduction

Cross-border payments still cost too much and take too long. The World Bank reports the global average cost of sending $200 remains far above the SDG’s 3% target.

At the same time, corporate buyers are raising the bar, with firms increasingly expecting cross-border payments to deliver the same speed, predictability and visibility they get domestically.

Policy and market forces are now aligned to close this gap. The G20 Roadmap prioritizes cheaper, faster, more transparent and more inclusive cross-border payment services, which in practice means harmonized data, interoperable systems and compliance that travels with the payment.

For finance and payroll leaders, that translates into pragmatic steps: standardize payment data to cut exceptions and FX surprises, add pre-validation to reduce returns, choose rails and corridors that balance speed with cost and transparency, and bake in compliance so scaling into new markets does not slow payouts.

This guide breaks down those best practices so you can reduce landed costs, accelerate time-to-credit and give international teams the clarity they expect.

Anchor Payroll KPIs to G20 Targets for Speed, Cost and Transparency

By the G20’s end-2027 targets, cross-border payments should be cheaper, faster and more transparent. For speed alone, the FSB sets a clear bar: 75% within 1 hour credited to beneficiaries.

Payroll teams can translate those policy goals into operating metrics. Anchor cost to the FSB’s remittance benchmark—keep relevant corridors at or below 3% remittance costs—and define speed as “time-to-credit” from funding to funds available. For transparency, measure two things: whether workers see the total landed cost and ETA before you send, and whether each payment is trackable end to end.

Implementation is straightforward. Establish dashboards that show time-to-credit by corridor, all-in landed cost (fees plus FX spread), and a transparency score: the share of transactions with quoted total cost and stated delivery time at initiation, and the share with full tracking. Bake these KPIs into provider SLAs and route selection so payments are automatically steered to rails and partners that meet your thresholds.

To ensure transparency sticks, align your UX and data capture to the policy ask for upfront disclosure of total costs and expected delivery times. And use market benchmarks to calibrate ambition: SWIFT reports that about 90% within an hour is already achievable on gpi payments, showing what best-in-class looks like today.

When your KPIs mirror the G20 objectives, you gain a simple, defensible scoreboard that reduces landed costs, accelerates payouts and builds trust with international teams.

Key Takeaways:

• Use policy-aligned KPIs: speed as time-to-credit against the end-2027 targets; cost as all-in landed cost with corridor caps near 3%; transparency as upfront quote plus trackability.
• Operationalize measurement: corridor dashboards, provider SLAs and automated routing tied to thresholds for speed, cost and disclosure.
• Calibrate ambition with benchmarks: gpi’s 90% within an hour shows what’s possible; design UX to meet the upfront disclosure standard.

Standardize Payment Data and Routing

The industry’s data pivot is already underway: SWIFT’s cross-border ISO 20022 migration went live in March 2023, accelerating a shift to richer, structured information that reduces friction across chains.

Harmonizing that information matters. The BIS/CPMI has set out harmonised data requirements for cross-border payments, noting that consistent, structured fields enable straight‑through processing and improve speed, cost and transparency. In practical terms, this means capturing purpose codes, structured addresses, ultimate originator/beneficiary details, and identifiers like LEIs in the right ISO 20022 fields so your payments flow without manual repair.

Here’s how to put it to work. First, upgrade your instruction templates to ISO 20022-native fields and require structured inputs (no free text for names or addresses) so screening and reconciliation work automatically. Second, activate pre-checks: use SWIFT’s service to verify account details before you send, cutting returns and investigations. Third, route by corridor: prioritize rails that are converging on instant interlinkage, using the Project Nexus blueprint as your north star for where speed and transparency will improve next.

Regulation is reinforcing these operational moves. In the EU, providers must check that a payee’s IBAN and name match for instant euro payments, a pre-validation step that reduces misdirection and exception handling at scale.

When you standardize ISO 20022 data, add pre-validation, and steer flows toward modernizing corridors, you reduce exceptions, accelerate time‑to‑credit and lower landed costs without compromising compliance.

Key Takeaways:

• Make ISO 20022 work for you: populate structured fields (purpose, parties, LEI) to raise straight‑through processing and clarity.
• Add pre-validation at initiation: check account and beneficiary details to cut returns and investigations before funds move.
• Route intelligently: favor corridors moving toward instant interlinks and standardized interfaces to improve speed and transparency.

Embed Compliance by Design: Sanctions, BOI/KYB and the Travel Rule

Compliance deadlines are now shaping payment operations: starting January 1, 2024 many U.S. companies must report beneficial owners to FinCEN. In parallel, the EU’s Travel Rule for crypto-asset transfers begins applying on 30 December 2024, raising the bar for cross-border data sharing.

Embedding compliance by design means building BOI/KYB verification, sanctions controls, and Travel Rule data into your onboarding and payment flows before money moves. Sanctions screening must account for ownership, not just names on a list; under OFAC’s rule, entities owned 50 percent or more by blocked persons are also considered blocked. Treat these requirements as functional specs for your data model, not after-the-fact checks.

Put this into practice in three moves. First, capture beneficial owner data at onboarding and map it to payment messages so counterparties and screening tools see the same structured information. Second, perform pre- and post-transaction sanctions screening with ownership analytics, then hold or auto-route exceptions to manual review. Third, for wire and crypto corridors, collect and transmit originator and beneficiary information end to end so Travel Rule obligations are met without rekeying.

Expect cross-border nuance. FATF reports Travel Rule implementation remains relatively poor, so counterparties may be unable to share all fields; the UK’s FCA expects firms to take reasonable steps to comply when dealing with such jurisdictions, including additional due diligence or declining transfers.

When compliance is designed into your payment data and workflows, you reduce false starts, avoid sanctions breaches and accelerate time-to-credit without sacrificing coverage.

Key Takeaways:

• Treat BOI/KYB, sanctions ownership rules and Travel Rule data as core payment requirements, not bolt-ons.
• Structure onboarding and payment messages so beneficial owner and counterparty data flow into screening and downstream reporting.
• Anticipate corridor differences: if Travel Rule readiness is weak, apply risk-based “reasonable steps” and escalation paths before sending funds.

Instant Payments, Stablecoins and CBDC Readiness

Across major markets, instant payments are moving from optional to inevitable: in Europe, lawmakers want instant euro transfers to be affordable, secure and available 24/7 with identity checks to curb fraud. In parallel, Asia’s push to interlink domestic instant schemes is accelerating, with the BIS and five central banks signing an MoU to connect systems via Nexus.

Selecting rails now means matching use cases to the right infrastructure per corridor. Where domestic instant rails exist, they set a UX bar your cross-border payouts must approximate; in the U.S., the FedNow Service provides the underlying instant payment infrastructure that banks can use to deliver real-time experiences. For corridors where instant interlinking is emerging, plan for hybrid routing that combines IPS-led speed with correspondent transparency until coverage matures.

Implementation starts with a corridor playbook. Define primary rails by speed/cost/transparency targets, and a fallback rail for resilience. For 24/7 treasury moves and just-in-time payroll, consider regulated stablecoin options where appropriate, anchored to MiCA’s guardrails that began applying on 30 June 2024 for asset‑referenced and e‑money tokens; your due diligence should emphasize reserves, redemption, and governance equivalence to traditional money.

Looking ahead, make your architecture CBDC‑ready. The Eurosystem has entered a digital euro preparation phase, while BIS pilots like Nexus and other multi‑CBDC experiments suggest a future of interlinked instant systems and programmable settlement; rails and providers that are ISO 20022‑native, pre‑validation capable, and open‑API oriented will adapt fastest.

Route selection that blends instant rails, regulated tokenized money, and CBDC‑ready design gives you faster, cheaper, more transparent payouts without locking you into yesterday’s plumbing.

Key Takeaways:

• Prioritize instant rails: EU policy pushes instant euro payments to be affordable and available 24/7; Nexus-style interlinking across Asia signals where cross-border speed is improving next.
• Add regulated token rails selectively: Under MiCA (from 30 June 2024), stablecoins with robust reserves and par redemption can support 24/7 treasury and payout workflows.
• Build CBDC readiness in your stack: Choose providers and rails that are ISO 20022‑native, API‑first, and aligned with the digital euro preparation phase and BIS‑led interlinking so you can adopt new corridors quickly.

Turn Best Practices into Paychecks—Fast

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