What are cross-border payments? How they work, advantages, and challenges

What are cross-border payments?

Cross-border payments, also known as cross-border payments, are financial transactions made between two parties located in different countries.

These payments allow sales and payments in multiple currencies, utilizing international payment systems and adapting to the specifics of each market. They are key for industries such as e-commerce, digital services, and remittances.

Cross-border payment methods

Whether your business operates regionally or globally, it's key to understand the most common methods for managing cross-border payments. These are the main ones:

Traditional electronic transfers (wire transfers)

These are international bank transfers processed between financial institutions through networks such as SWIFT or SEPA. They are typically used for large amounts and B2B transactions, and while they offer security, settlement times can be slow and transaction costs high.

Electronic funds transfers (EFT)

Also known as electronic bank transfers or digital checks, they are faster than traditional transfers, although they depend on the local infrastructure of the sending and receiving countries. 

Credit card payments

It's one of the most widely used electronic payments for global sales, especially in e-commerce. Payments can be made in different currencies, but they often include conversion fees and the risk of chargebacks.

Online payment platforms

Solutions like PayPal, Wise, and similar allow you to send and receive money in multiple currencies in real time, quickly, and with competitive fees. They're ideal for one-time transactions or early-stage small businesses.

However, as you scale, these platforms can limit checkout customization, create friction in reconciliation, and impact your margin.

Cryptocurrencies

One of the emerging payment methods for cross-border transactions. Although it promises speed and low costs, its volatility and lack of mass adoption still pose challenges. Some companies are exploring the use of blockchain as a secondary option or in specific markets.

International money orders

Although they are becoming less widely used, they remain an option for small amounts in some contexts, especially where access to digital solutions is limited. They are processed through postal service providers or financial institutions.

Cross-border payments with local expertise (Rebill model)

Unlike traditional transfers or global platforms that involve currency conversions visible to the end customer, solutions like Rebill allow users to be charged in their local currency, via cards, bank transfers, digital wallets, or cash , without the transaction being perceived as international.

In this model, the transaction is local to the customer , which reduces friction, improves the conversion rate and eliminates conversion costs for the user.

Rebill receives those funds in local currency, converts them to USD, and makes an international transfer to the merchant's country , simplifying the experience for both the buyer and the seller.

This architecture allows operations to scale across multiple countries without opening local entities, while maintaining a seamless collection experience tailored to each market.

How do cross-border payments work?

When using a traditional bank, the payment process involves several entities before reaching the recipient. If the seller doesn't have a bank account at the receiving bank, the funds must be processed by intermediary banks, which adds delays and additional costs.

With Rebill , you can manage payments across multiple countries from a single integration. The platform handles currency conversion, compliance with local regulations, and direct transfer of funds, eliminating operational friction.

Advantages of cross-border payments 

For companies

• Barrier-free international expansion: They allow you to sell in new markets without friction, accessing customers, suppliers, and strategic partners. This enables international trade with a single collection infrastructure.
• New sources of income: Selling abroad increases business opportunities and accelerates growth. By diversifying your presence, you also improve the stability of your income.
• Local risk reduction: By diversifying markets and currencies, exposure to national economic crises is mitigated. This helps maintain stable cash flow, even in unstable environments.
• Cost optimization: Some international payment methods are more affordable than traditional banking channels. In addition, hidden conversion and intermediation fees are eliminated.
• True financial flexibility: Businesses can choose the best payment method based on currency, country, or payment type. This improves the payer experience and better adapts to the type of transactions performed.
• More efficient operations: Advanced platforms automate accounting conversions, reconciliations, and reporting. This way, your finance team can focus on strategic, not operational, tasks.
• Hassle-free global payments: Facilitate transfers to suppliers or freelancers in any country from a single system. This streamlines contracting and collaboration processes without administrative friction.
• Resilience in adverse scenarios: Having revenue in different regions helps sustain operations in the face of local crises. A global revenue network protects your business against sudden declines in a single market.

For customers

• Global access from any country: You can easily purchase products and services from international brands. This expands your options and improves your digital shopping experience.
• Payments in their own currency: They choose to pay in their local currency, even if the merchant operates from another country, without any surprises at the end. This reduces friction and improves conversion at checkout.
• Security and trust: Using familiar methods like local cards, PayPal, or digital wallets improves the shopping experience. Trust in the payment method is key to completing the transaction.
• Experience tailored to the local market: Companies that operate well internationally tailor prices, messaging, and payment methods to each country. This creates proximity, greater loyalty, and a sense of local purchasing, even for businesses operating in the global market.

Challenges of cross-border payments 

Learn about the main challenges and some tips to optimize your cross-border payment management in Latin America.

• Local regulations: Each country has its own regulations regarding payments, data protection, and AML (anti-money laundering). Complying with these regulations can be costly if you don't have a solution that already operates within these frameworks.
• Currency risks: Exchange rate fluctuations can affect revenue. Multi-currency reconciliation and transparent rates allow for financial control.
• High transaction costs: Conversion and intermediary fees increase the cost of each sale.
• Variable fees depending on method and country: Additional charges vary depending on the payment method and source. Having clear rates improves your planning and user experience.
• Operational complexity: Processing international payments involves reconciliations, validations, and local adaptations. Centralizing everything under a single infrastructure saves time and effort.
• Fraud and cybersecurity risks: Cross-border payments can be more vulnerable. Using a PCI DSS-certified platform with anti-fraud software significantly reduces this risk.

Companies that make cross-border payments

These are the most important cross-border payment companies in Latin America.

Rebill

Rebill is a payments and subscription platform designed specifically for Latin America. It allows businesses to charge in local currency and manage currency conversions, offering a comprehensive payment solution for cross-border transactions in the region, without the need to open local entities in each country. 

It also offers immediate human support, unified reconciliation, automatic invoice issuance, and a transparent structure.

Ideal for SaaS, Edtech, Healthtech, and global platforms that need to operate in multiple countries without losing control or scaling operational complexity. We operate in the region's key markets.

Wise (formerly TransferWise)

Wise is a British fintech that offers fast, low-cost international transfers for individuals and businesses. Its platform allows for money transfers in multiple currencies with transparent fees and no hidden markups. It also offers multi-currency accounts and integrates with banks and businesses through its Wise Platform.

PayPal

PayPal is one of the most well-known digital payment services worldwide. It offers services like Xoom for remittances and facilitates international payments for consumers and businesses, although with fees that include a surcharge on the mid-market exchange rate.

Stripe

Stripe provides payment infrastructure for digital businesses and e-commerce, enabling companies to accept online payments and manage international transactions. Its platform supports multiple payment methods and currencies, and offers tools to simplify the complexities of cross-border payments.

Payoneer

Payoneer is a financial services company that facilitates cross-border payments for businesses and professionals worldwide. It offers accounts that allow sending and receiving funds in various currencies and provides solutions for managing B2B payments, freelance services, and access to working capital.

The future of cross-border payments in Latin America

With the advancement of new technologies and the expansion of e-commerce, cross-border payments in Latin America are expected to become faster, more secure, and more accessible.

The growth of digitalization, along with the increased adoption of alternative payment methods, is driving e-commerce to unprecedented levels. Companies that can adapt to local payment preferences and country-specific regulations will be better positioned to succeed in this environment.

Rebill helps you manage cross-border payments efficiently, integrating local payment methods and complying with international regulations. Contact us today and find out how you can expand your business globally and simplify cross-border payments.