The customer experience gap in cross-border payments

Cross-border payments are evolving rapidly. Money moves fast and businesses have more choice than ever when sending money across the globe. But while the industry has rightly focused on speed, another part of the journey deserves just as much attention.

The opportunity today goes beyond moving money. It lies in making the experience clear and reliable for customers to never have to ask what is happening with their funds. The businesses that stand out will treat the payment experience as part of the product, not an afterthought to the sale.

A hidden cost the whole industry carries

The lack of visibility comes at a significant cost. Financial institutions spend more than USD 1.6 billion every year investigating delayed payments, and some of the world's largest banks pay more than USD 20 million annually in fees and penalties on top of that. This is money spent chasing payments that should never have gone missing.

When a payment is missing information or requires compliance checks, resolving it can take five to ten working days as enquiries pass between institutions. For the business waiting, every additional day is another cost, whether tied-up working capital or delayed supplier payments.

Even where tracking exists, it often remains a pay-to-play service, rarely accessible to the end customer. A business chasing a stalled payment has little choice but to call or email their provider, with every touchpoint landing in a support queue, adding cost while doing little to improve the experience.

The root cause is the way these payments travel. International payments rarely move in a straight line. They pass through a chain of correspondent banks, and if one pauses a payment for compliance, no single party can see where it is or give the customer a straight answer.

The impact of a stalled payment

In B2B, a delayed payment is never an isolated issue. There is almost always someone downstream relying on those funds, whether a supplier waiting to be paid, a customer expecting an order or a business meeting its own obligations.

When a payment stalls, the sender is left answering questions they cannot answer themselves. Somewhere along the chain, a bank may be holding the transaction to validate the payment instructions, yet neither sender nor recipient can see what is happening. Every day that uncertainty continues erodes trust and puts pressure on business relationships.

Direct clearing already solves much of this

Where a business has direct access to local payment rails, much of the friction disappears. Direct clearing means connecting straight to national payment systems and bypassing the layers of correspondent banks that create delays in the first place. Here in Australia, we clear directly through the NPP for instant domestic payments and BECS for batch clearing, settling in real time with the data carried alongside the transaction rather than stripped from it.

The benefit is not only speed. Fewer intermediaries mean lower risk of delays, and settlement through central bank channels moves funds through the most secure route available. For the businesses we work with, that is the difference between a payment they can stand behind and one they have to chase. For a large share of what our clients send, direct clearing delivers the speed, security and transparency they need. The gap appears in the corridors where direct access is restricted. That is where a new approach earns its place.

Stablecoins close the gap

Where direct clearing is not easily available, a different kind of infrastructure begins to change the picture. Stablecoins, a form of digital cash issued as tokens on a blockchain, remove much of the intermediary chain that creates these delays and, with it, the uncertainty around where a payment is. Rather than sending dollars through multiple correspondent banks, the sender converts them into a stablecoin of equal value and transfers it directly to the recipient, who can convert it back into fiat if they choose. Settlement can occur almost immediately.

The real breakthrough is not speed. It is transparency. Every movement is recorded on a shared ledger that cannot be altered or hidden, creating a clear record of where the money travelled, when it moved and who handled it. Rather than relying on multiple institutions to investigate a payment, businesses gain far greater visibility throughout.

No longer a niche

The scale is easy to underestimate. A recent McKinsey analysis reported stablecoins used for payment transactions now settle in the order of USD 390 billion annually, with B2B payments making up $226B or around 60 percent of global stablecoin volume, increasing 733 percent year on year. What was once a niche technology is becoming part of mainstream financial infrastructure for businesses.

They are unlikely to completely replace traditional rails. Stablecoins are emerging as a complementary layer offering greater speed, visibility and reach. Regulation is evolving alongside rather than holding it back, with frameworks now established across the European Union, Singapore, Hong Kong, Japan and the United States.

Earlier this year, Banking Circle launched its stablecoin settlement services, becoming the first institution in Luxembourg to hold banking, electronic money token and crypto-asset service provider licences simultaneously. That lets businesses move directly between traditional currencies and leading stablecoins through a single regulated platform, pairing the speed of blockchain settlement with the compliance expected from a regulated bank. It builds on infrastructure that processes more than EUR 1.5 trillion annually for over 850 payment firms and institutions.

Service is the strategy

The future of payments will rely on intelligent routing. Rather than a person deciding how each payment should be sent, technology will increasingly weigh speed, cost and availability to determine whether funds move via stablecoins, correspondent banking or domestic rails.

But technology is only the means to an end. The businesses that differentiate themselves are those that use these innovations to make the payment journey faster, more secure and more transparent, and ultimately more human. Moving money quickly is no longer the hard part. Giving customers confidence and visibility throughout the journey is where the industry's next competitive advantage lies.