A cross-border payment is a financial transaction that involves the transfer of money between individuals or organizations in different countries. These payments can be made for a variety of purposes, including the purchase of goods or services, the transfer of funds to family or friends, or the payment of bills or expenses.
Cross-border payments can be made using a variety of methods, including wire transfers, bank drafts, and online payment platforms. The specific method used will depend on the countries involved, the amount of money being transferred, and the needs and preferences of the sender and recipient.
In order to facilitate cross-border payments, financial institutions and payment processors typically use a network of correspondent banks and other intermediaries to transfer the funds between countries. This can involve the use of multiple currencies, as well as the conversion of funds from one currency to another.
Overall, cross-border payments are an important part of the global financial system, as they allow individuals and businesses to make and receive payments across international borders. However, these payments can also be subject to certain fees and exchange rate risks, depending on the method used and the countries involved.
This page was last updated on January 3, 2023.