Cross-border payments are those type of payment where the payer and payee reside in different jurisdictions.
Many of these are also cross-currency payments – that is, payments where the payer and payee are respectively debited and credited in different currencies. Payments within monetary unions or payments in a common invoice currency may be cross-border but not cross-currency.
In layman terms a cross border payment is a payment done across countries. The most known cross border payments are the remmitances, money migrant workers send to their home country.
Note that cross-border payments is a vast and very lucrative domain. As payment rails for cross-border payments we have:
- Swift correspondent banking rail, where diferent banks from diferent countries send payments through Swift
- Fintechs rails like Wise (former TransferWise) or older estableshed services like VISA , Maastercard, MoneyGram etc.
- New blockchain based solutions like Ripple Network etc.
This is a series of posts with definitions for the jargon used in #banking, #fintech and #payments.
Too many people use some terms without understanding them beyond the definition.
Too many “experts” use the terms but they never had experience with the actual implementation of anything in #banking, #fintech and #payments.