Kanishka NaikCross-border payments are financial transactions between parties in different countries. They require moving value across separate national payment systems, currencies, and regulatory frameworks.
The primary infrastructure for cross-border payments has been the SWIFT network, founded in 1973, which provides standardized messaging between over 11,000 financial institutions across more than 200 countries and territories.
Because national payment systems are not directly linked, banks use correspondent banking relationships. A bank maintains foreign-currency accounts with partner banks abroad. When a payment is sent, debits and credits flow across these linked accounts without physical currency movement.