Cross-border payments – whether for individuals sending remittances or businesses transacting globally – have long been ripe for fintech disruption. The UK, with London as a global financial center and a diverse, international population, has been a hotbed for innovation in this space. As of 2025, cross-border payment solutions continue to evolve in pursuit of being faster, cheaper, and more transparent than traditional banking wires.
We have put together a few key facts of the industry as of May 2025.
Market Size and Importance
Globally, cross-border payments are massive, with the industry projected to reach $290 trillion in value by 2030 across B2B, B2C, P2P, and other flows. For the UK specifically, think of all the remittances sent by migrant workers, international trade payments by UK businesses, inbound tourism spending, etc.
Traditional bank international transfers (SWIFT wire transfers) have historically been slow (taking 1-3 days) and expensive (often £20-£50 fees plus poor exchange rates). Fintechs identified this pain point early on: for instance, Wise (TransferWise) launched in 2011 to significantly undercut bank fees by using peer-to-peer forex matching and charging a low percentage fee.
Today, Wise is a public company moving over £8 billion a month, saving customers fees compared to banks. Similarly, Revolut gained popularity in part for offering near-market exchange rates for travelers and expats. These fintech services have pressured banks to improve – many banks now promote “fee-free” or lower-cost remittances and have improved FX rates due to fintech competition.
Remittances and P2P International Transfers
The UK is one of the top outbound remittance sources (thanks to its large immigrant communities). Fintech operators like Wise, WorldRemit (a UK-based remittance fintech), Remitly, Azimo (acquired by Papaya Global in 2022) have vastly improved the user experience to send money home.
They leverage local payment networks to avoid using SWIFT – e.g., money is received in local currency via that country’s domestic transfer.
This model can be much faster: many transfers via fintechs now arrive within seconds or minutes, especially with instant payment schemes proliferating worldwide.
Costs have reduced too: whereas banks might implicitly charge 5-8% in exchange rate markup, fintechs charge perhaps 0.5-2%. According to the World Bank, the global average cost of remittances is ~6% of the amount sent (as of recent years), but services like Wise often charge under 2%. The UN’s goal is to reduce remittance costs to 3% by 2030, and fintechs are driving that progress.
B2B and SME Cross-Border Payments
For businesses, especially SMEs, fintech solutions (sometimes called FX fintech or international payment providers) offer better exchange rates and easier online platforms compared to legacy bank trade services.
Companies like Wise Business, Revolut Business, WorldFirst, and newer B2B specialists like Airwallex or CurrencyCloud (which is now part of Visa) provide multi-currency accounts, so an SME can hold balances in various currencies and pay out from them without converting unnecessarily.
This is hugely useful for e-commerce sellers or contractors working with clients abroad. Banks still dominate large corporate cross-border flows – in fact, banks account for ~92% of global B2B cross-border payment volumes (which were ~$27.8 trillion in 2023). Non-bank players, including fintechs, have about 8% (split between corporate and SME-focused services).
So while fintechs have made a dent, there is still a vast opportunity to capture more of the B2B market that banks currently serve (often at high fees). Fintechs are doing this by offering better tech integrations (like API-based payments for online businesses), superior customer service for SMBs who might feel neglected by big banks, and additional services like invoice financing around the payments.
Banks still handle the lion’s share of global B2B cross-border payment flows (FY 2023), but non-bank fintechs are gradually expanding their slice of the market. The chart shows ~92% of $27.8 trillion B2B flows processed by banks, with the remaining 8% split between fintechs serving corporates and SMEs.
Innovation and Technology
Several key innovations are improving cross-border payments.
Real-Time Payments Linking:
Domestic instant payment systems are being connected across borders. For example, the Bank of England has been exploring links between the UK’s Faster Payments and other countries’ systems. There’s an initiative between Singapore and the UK to link Faster Payments with Singapore’s PayNow for real-time transfers. If more of these links happen, eventually sending money abroad could be as fast as a text message.
SWIFT gpi:
The SWIFT network (used by banks) introduced the gpi (Global Payments Innovation) which has significantly sped up correspondent banking transfers and provides tracking. Many SWIFT gpi payments are now same-day and come with end-to-end status visibility. UK banks participating in gpi can offer corporate clients better service (you can track your international payment like a FedEx package).
Blockchain and Crypto:
A number of fintechs and banks are trialing crypto or DLT-based cross-border payments. Ripple (with its XRP-based solution) engaged some payment firms and banks (including some UK MSBs) to use its network for fast settlement – though regulatory issues with XRP have hindered it in the US, some usage continues elsewhere.
Stablecoins are being used in pilot programs to move money between countries outside traditional rails. For instance, a UK company might use USDC stablecoin to send money to a partner in Asia within minutes, who then cashes out to local currency. While not yet mainstream, if regulated stablecoins become reality, they could supplement existing networks for after-hours or rapid wholesale settlements.
FX Management Tools:
Fintechs are layering additional tools around payments – e.g., the ability to lock exchange rates (forward contracts) for SMEs, or algorithms that split a large transfer over time to average out FX rates. These were once the domain of big banks’ treasury departments, now made accessible via user-friendly fintech apps.
Open Banking for FX:
Some fintech services use open banking to pull funds from a sender’s bank account (in local currency) and then handle the FX conversion and payout. This reduces card fees or the need to send a wire to the fintech’s account – it can directly debit the user’s account via an API. It simplifies the user journey further.
Regulatory and Compliance Challenges:
Cross-border payments face heavy compliance requirements, primarily around Anti-Money Laundering (AML) and sanctions. Fintechs in this domain must have strong AML controls as they can be targets for illicit flows if not managed (moving money internationally is what money launderers seek to do).
The FCA has clamped down on some e-money firms for weak AML systems in the past. As mentioned earlier, de-risking by banks affects this space: many fintechs rely on partner banks to hold funds or provide FX liquidity, and some banks have cut off correspondents or MSB accounts for fear of AML risk. This makes it crucial for fintechs to maintain impeccable compliance to keep partnerships and accounts open.
On the positive side, regulators globally (FSB, FATF) are working on initiatives to improve cross-border payments as a policy goal, focusing on things like harmonizing ID requirements, promoting data sharing for compliance, etc.
The G20’s roadmap for enhancing cross-border payments, which the Bank of England actively supports, includes multiple building blocks (from extending operating hours of payment systems to exploring CBDCs for cross-border use). UK fintechs are aligned with these efforts since smoother rules and standards internationally will benefit those offering cross-border services.
Competition and Cost Trajectory:
The competition in this space has definitely driven costs down. The traditional players (like Western Union, MoneyGram) have had to slash fees or launch their own digital apps to keep up with fintech challengers.
Banks have introduced their own fintech-like services (HSBC’s Global Money account offers fee-free transfers for some corridors, for example). We’re likely to see further reduction in fees and narrowing of FX spreads as fintechs optimize and scale.
However, one should note that some remittance corridors are more expensive than others – high-volume corridors (UK to India, UK to Nigeria, etc.) have become relatively cheap due to competition, whereas exotic or low-volume routes remain pricier.
Fintechs might tackle those next by forming networks or using crypto as intermediary where banking links are weak.
In conclusion, cross-border payments have transformed from a stodgy, opaque process to a tech-enabled, user-centric service largely thanks to fintech innovation. The UK’s role in this is significant, with companies leading internationally. As we head further into 2025, expect continued progress toward the holy grail of cross-border payments: transactions that are instant, nearly free, and as straightforward as a domestic payment, all while maintaining strong security.
Achieving that universally is challenging, but each year the industry moves a bit closer, with UK fintechs among those at the helm.
