Moving money across borders still means navigating a patchwork of correspondent banks, local clearing systems and compliance checks that slow transactions, inflate costs and introduce uncertainty to every step.
The demand for improvement is already there. PYMNTS Intelligence data indicate that 14% of U.S. consumers made cross-border payments in the past year and 63% of those users turned to digital wallets to do it. Yet small businesses remain stuck. One in 3 cite the lack of an industry standard as a reason for avoiding those tools, pointing directly to a lack of interoperability as the core barrier.
Bank-FinTech Partnerships Fill Gaps
Separate PYMNTS reporting has consistently shown banks relying on FinTech partners to extend reach across borders, particularly in disbursements, remittances and B2B payments. Those partnerships are built around access: FinTechs provide connections to local payout networks, while banks provide balance sheet, compliance oversight and customer relationships.
The arrangement reflects the limits of existing infrastructure. Cross-border payments still depend on stitching together domestic systems that were not designed to communicate with one another in real time. FinTechs have addressed that gap by building orchestration layers that route payments across networks and jurisdictions.
That model remains in place even as central banks extend their reach.
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The Federal Reserve’s proposal to expand FedNow into cross-border use cases introduces one such approach. The plan would allow U.S. banks to use intermediaries, including correspondent banks, to complete the international portion of a transaction. The change would allow banks to settle the domestic leg through FedNow while relying on intermediaries for the cross-border component. This does not remove correspondent banking from the process. But it would compress the timeline and introduces real-time capabilities into part of the transaction flow.
Tokenization Aims to Redesign Settlement
Project Agorá, led by the Bank for International Settlements and several central banks, takes different view. The initiative is examining how tokenized central bank money and commercial bank deposits can operate on programmable platforms to support cross-border payments.
The design focuses on reducing duplication. Today, cross-border payments require multiple institutions to perform similar compliance checks and reconcile separate ledgers. A shared infrastructure with programmable features could allow those steps to occur once, within a unified framework.
The project also highlights the structural issues central banks are attempting to address: different operating hours, legal regimes and technical standards that complicate even straightforward transactions.
Interoperability Remains the Constraint
The PYMNTS Intelligence data points to the same conclusion. Concerns about compatibility and standards continue to limit broader participation.
The same constraint applies to central bank initiatives. Real-time rails and tokenized platforms cannot operate in isolation. They must connect with existing bank systems, FinTech networks and international payment corridors.
Bank-FinTech partnerships remain relevant in this environment. Even as central banks build new infrastructure, those partnerships provide the integration layer that allows payments to move across jurisdictions.
Competition Shifts to Infrastructure
Central banks are not replacing private networks in the near term. Card schemes, correspondent banks and FinTech platforms still provide global reach and established connectivity.
What is changing is the point of control. By extending domestic systems such as FedNow and exploring shared platforms through projects like Agorá, central banks are positioning national and regional infrastructure as the foundation for cross-border payments.
For banks and FinTechs, instead of building entirely separate cross-border networks, they may increasingly connect into central bank-led systems while continuing to provide the services that make those connections usable: routing, compliance, liquidity management and customer interfaces.