Frédéric Viard, Head of Strategic Product for Financial Messaging, Bottomline
International trade is a political pawn half as old as time. The demand for smarter, faster, safer cross-border payment solutions is also enduring, but far more urgent, given today’s global digital dependencies.
As for instant cross-border payments, managing the inflexibility of currencies and their bureaucratic frontiers is complex, to say nothing of the cybersecurity this task requires.
Among other obstacles is one fundamental question: Is market demand for instant cross-border business payments strong enough to make it a priority today?
My perspective on this – the opportunities and challenges – is informed by developments in my home market, the Eurozone.
The State of Instant Payments in Europe
Europe is undergoing a mandatory transformation in its payment infrastructure, driven by regulations including the EU Instant Payment Regulation (IPR) for standardising real-time payments in the Single European Payments Area (SEPA).
The industry reached its first milestone on January 9, 2025, when banks and financial institutions became obligated to receive instant payments. By October 2025, banks must be able to send instant payments and implement verification mechanisms for payment recipients.
These regulatory changes are creating a foundation for instant payments across adjoining regions of the EU. And while the EU and the UK have been ahead of the US on instant payments, remember this: most instant payment schemes today are primarily domestic in nature. Only a small percentage of all payments combined are currently cross-border, and these usually focus on specific commercial corridors.
In Europe, the European Payment Council’s push for standardisation around Instant Payments across the Eurozone is a positive step, but achieving true cross-border interoperability for instant payments globally requires more than just regulation. It demands technical compatibility between different national instant payment systems that were originally designed to operate independently, and within their own borders.
Regional Integration vs. Global Connectivity
Regional initiatives are showing promising progress in connecting instant payments across borders. For example, Nexus Global Payments in Singapore (formerly known as ‘Project Nexus’) illustrates how instant payment systems can interlink within a specific region (in that case, Asia). It allows for faster integration by working with payment systems that share similar characteristics, and operate in neighbouring time zones.
I believe this regional approach is likely to be more successful in the near term than attempting to create a single global instant payment ecosystem. The latter increases exponentially in complexity when trying to connect systems across vastly different regions with varying regulatory requirements, technical standards, and business practices.
Major correspondent banks operating globally are well-positioned to facilitate cross-border instant payments due to their extensive international presence. These institutions have invested heavily in connecting to multiple instant payment schemes worldwide, giving them a head start and a competitive advantage.
And that’s important: smaller banks face significant challenges in this space, often needing to rely on correspondent banking relationships to provide similar services to their clients.
This is where Payment Service Provider (PSP) partnerships can make a critical difference.
The Economic Barriers to Implementation
The most significant barrier to widespread adoption of cross-border instant payments is the high implementation cost and operational complexity coupled with uncertain revenue models. For a small local bank in Switzerland, for example, the cost of establishing direct access to instant payments in Far East countries would probably far outweigh the potential revenue from such transactions.
This creates a fundamental business challenge: how do financial institutions justify the substantial investment required to build and maintain these connections? For many banks, particularly smaller institutions, the economics simply don’t work. Instead, they rely on larger correspondent banks to process their international payments, adding intermediaries and potentially increasing costs and processing times.
The profitability equation becomes even more challenging when considering the need for 24/7 operations, enhanced security measures, and compliance with varying regulatory requirements across different jurisdictions. Banks must carefully evaluate whether their transaction volumes justify direct connections, or if they should leverage existing networks and partnerships.
For businesses with lower transaction volumes or infrequent needs for specific payment corridors, a cost-benefit analysis often favours traditional payment methods. Going back to the Far East country example: A company making only occasional payments to this country might accept higher fees for their rare transactions, rather than investing in dedicated instant payment infrastructure.
Technical Requirements and Emerging Technologies
Implementing cross-border instant payments will require major architectural changes to core banking systems. This is the “legacy landslide” of outdated core banking systems that the industry has, for the most part, avoided (until now), using cloud computing and the like.
For cross-border instant payments to have a chance, complex technical elements can’t be rushed. It’s a much bigger hurdle than a domestic instant payment, which is already challenging in itself.
Financial institutions need to ensure high availability with systems that can run continuously without interruption. Multi-threading capabilities are essential to enable parallel transaction processing and parallel checks, and exception-handling mechanisms must be carefully thought out to manage errors without disrupting the overall system and without human intervention in the context of instant payments.
Emerging technologies play an increasingly important role in addressing these challenges. Even Blockchain presents a potential alternative channel for cross-border payments, though it comes with its own set of risks and requirements.
Artificial intelligence has a role going forward, unsurprisingly. Generative AI (GenAI) can help reduce exceptions and improve payment routing by learning from transaction flows. Also, Open Banking initiatives play a part by enabling new payment triggers, providing consolidated views of multiple accounts, and facilitating direct debit payments.
The ISO 20022 standard is crucial for enabling rich data exchange between different payment systems. It supports machine readability, interoperability, and provides the foundation for value-added services and new payment offerings.
Implementing these technologies requires significant investment and expertise. Banks need to develop new skills and capabilities to effectively leverage these tools while maintaining the security and reliability that customers expect. More and more, banks and financial institutions are turning to PSPs that operate thriving global networks.
What Does Success Look Like?
Will we have truly global instant B2B payments soon? Yes, in the near future, the transformation is underway.
Regional integration appears to be the most practical approach in the near term, with global connectivity developing more gradually as standards like ISO 20022 create new efficiencies, and as economic barriers are addressed.
For banks and payment service providers, the key is carefully balancing investment with expectations, focusing on corridors with sufficient transaction volumes to justify direct connections.
Collaboration is essential to create the network effects needed for the widespread adoption of cross-border instant payments. I expect to see collaboration and innovation in the space, with new technologies and business models emerging to address current limitations.
The future of cross-border instant payments will be shaped by a combination of regulatory initiatives, market forces, and technological advancements. Ultimately, it must deliver the seamless experience and security that businesses demand from any payment method.
