First things first: what are cross border payments, anyway? As the name suggests, a cross border payment is an international transaction. It takes place when the payer and recipient bank accounts are in two different countries, which means the payment must travel across global borders.
There are two main types of cross border payments:
Wholesale cross border payments take place between financial institutions and involve large-scale sums of money. Examples include the wholesale import and export of goods, financial market trading, and lending between two different financial institutions.
Retail cross border payments take place between individuals and businesses. This is the type of payment you’re most likely to facilitate as a small business owner, whether it’s a transaction with an individual client, supplier, or vendor.