Cross-border payments have always carried a premium because moving money across jurisdictions has been slow, fragmented, and operationally complex.
But a growing share of global trade now depends on payment networks designed to move money more quickly and predictably across borders. At the same time, central banks, commercial banks and technology providers are working on frameworks aimed at reducing friction in international settlement.
Recent PYMNTS Intelligence research highlights the scale of cross-border activity and the need for improvement. in “The cross-border opportunity: What global sourcing by US SMEs means for payment service providers“, PYMNTS Intelligence and MasterCard It found that 57% of US SMEs buy goods or inputs from outside suppliers. Among companies involved in international sourcing, 43% identified faster payment processing and settlement as their top priority, while 27% expressed interest in changing cross-border payment providers.
The report also found that 63% of internationally active SMEs pay third-party suppliers primarily in US dollars, while fintech companies had the highest customer satisfaction ratings among non-crypto providers.
These trends arrive as the broader payments industry considers a future in which settlement itself becomes increasingly standardized.
Settlement as the baseline
This is evident in the likes of Project Agora, an effort by the Bank for International Settlements with the participation of major central banks and commercial banks. like PYMNTS reported earlier this year, The project has expanded testing to include the Federal Reserve Bank of New York and central banks from Europe, Japan, Korea and Mexico. The initiative is exploring How commercial bank token deposits and central bank money can support more efficient cross-border settlement.
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Historically, many cross-border payment innovations have emerged through individual bank networks, bilateral arrangements, or private payment corridors. Agora represents a different approach, helping policymakers and central banks shape common settlement frameworks from the outset.
The project remains experimental, and questions surrounding governance, regulation, interoperability, and adoption remain unresolved. However, Agorá is part of a broader movement that includes ISO 20022 adoption and instant payment connectivity projects.
The biggest issue for banks and fintechs is what happens if faster and more predictable settlement becomes more widely available.
Adam IsraelCOO of FinTech notIt is believed that the economics of money transfer itself will face increasing pressure.
“The basic mechanisms for moving money will be commoditized first,” he told PYMNTS. “Historically, traditional financial institutions have made much of their margins from structural friction created by holding and settling funds over multi-day settlement windows.”
If these frictions decline, organizations may need to look elsewhere for differentiation.
He stated that compliance and oversight are becoming increasingly important competitive factors.
“The advantage will go to platforms that can demonstrate robust, audit-ready regulatory infrastructure and manage risk appetite from end to end, rather than just those that sell faster pipelines,” he said.
Yusuf Rizvimanager at Ridgway Financial Servicesbelieves that a similar transition process is underway.
“Once the settlement itself becomes an enabler, the competitive advantage shifts to everything surrounding the deal,” Rizvi told PYMNTS. “Underwriting, risk scoring, compliance automation, treasury management, customer experience and integrated financial services are becoming what differentiates.”
In Rizvi’s view, firms that rely primarily on correspondent banking spreads, remittance premiums, or opaque foreign exchange spreads could face increasing pressure as settlement capabilities become more widely available.
So the next phase of competition may focus less on payment fulfillment and more on services that help companies manage international operations.
Rizvi said the transformation is already underway.
“When the movement of money becomes a commodity, the margin moves into working around money,” he said. “Optimized multi-currency liquidity, real-time FX hedging, automated sanctions and anti-money laundering screening, and customer relationship layer are what organizations are achieving.”
This conclusion is consistent with PYMNTS intelligence findings. SMEs demand speed, but they also seek transparency, foreign exchange capabilities, customer support and payment certainty. These demands point to a market in which settlements increasingly function as infrastructure while value migrates to the services built around them.
For banks and fintech companies, the implications are significant. If cross-border settlement becomes more standardized, owning a payment network may be less important than owning the relationship with customers, managing liquidity efficiently and helping businesses navigate an increasingly complex regulatory environment. In this environment, the institutions that move money the fastest may not be the winners. It may even be what makes global trade easier to manage once payment itself becomes routine.
