Cross-border payments causing headaches? A prescription for your pain

Key Takeaways

Managing cross-border payments efficiently and accurately is essential to a successful treasury operation.

Businesses face common pain points when processing their cross-border payments, including unpredictable settlement times, lack of transparency, and insufficient payment details.

The good news is that the banking industry is evolving quickly with innovative solutions to make cross-border payments easier and faster.

Imagine you run an automotive manufacturer in the U.S. that has expanded with integrated suppliers across North America, with a parts supplier in Mexico, an assembly plant in Canada, and a distribution arm in the U.S. You depend on an efficient treasury operation to maintain strong relationships with critical vendors and optimize capital more effectively across all three countries.

Yet, managing cross-border payments continues to plague your business with headaches, including unclear statuses, siloed banking platforms, and inaccurate data and errors. With US$190 trillion in payments crossing global borders in 2023, and a projected US$290 trillion by 2030¹, many multinational businesses continue to feel under the weather when it comes to managing their cross-border payments. The good news is that the global banking industry is evolving quickly as it invests in innovative digital solutions to help businesses address these pain points.

Average times for SWIFT GPI payment to be credited to the recipient²:

50% settled within 5 minutes
60% within 30 minutes
80% within 6 hours
100% within 24 hours

Issue: There is a perception that cross-border payments are slow, but in today’s reality, wire transfers typically settle quickly. What’s often lacking is the ability of the sender and the recipient to see the payment status in real-time.

Businesses initiating cross-border transactions don’t have the same level of visibility as consumers whose transactions travel over real-time domestic channels. This makes it more difficult for them to handle cash flows effectively.

“Businesses frequently perceive wire transfers as slow because they don’t receive the confirmations and updates they’re used to receiving in other parts of their day-to-day lives,” explains John Ciccarone, Director, Cash Management Products, Global Transaction Banking. “This lack of visibility makes it difficult to focus on the true exceptions.”

Banking solutions: New payment tracking solutions can now provide senders and recipients with real-time payment updates along with insights that can help businesses reconcile transactions faster and reduce delays.

Issue: Businesses receiving and sending cross-border payments not only need visibility into fees, settlement currencies, and amounts, but they also need a single view of their cash position across regional operations. Think back to the automotive manufacturer with operations across North America. They may work with three different banks and in multiple currencies, making it challenging to see their full cash position and manage their day-to-day cash flow effectively. This incomplete picture can result in trapped liquidity.

“In an ideal world, there should be one simple view of all your business accounts across Canada, the U.S., Mexico, and Latin America and in the various currencies,” says John Hunter, Managing Director, U.S. Global Transaction Banking. “It should also be simple to move money between those multiple accounts, just like you would with your personal bank accounts.”

Banking solutions: Banks in some jurisdictions are using new data technology and artificial intelligence to develop more advanced reporting tools to provide businesses with clearer transparency of their cash position. As these technologies evolve, banks will continue to invest in value-added services for their clients.

Issue: An effective cash management operation requires businesses to quickly understand the details accompanying the payment, such as the purpose for the payment and the intended recipient’s name. Fragmented systems and a lack of standardization across borders mean the information accompanying the wire can get disconnected or be misinterpreted by the recipient.

Manual reconciliation and additional inquiries between banks and their clients take additional time and effort, leading to errors, additional costs, and inefficient processes that can damage vendor relationships, delay settlement times, and cause inefficient cash flow management.

“This disconnect is a major pain point for our clients,” said Ciccarone. “Businesses need to know exactly how much will arrive and when, but more importantly, they need detailed information about the payment to effectively manage those funds.”

Banking solutions: Powered by ISO 20022, data-rich payments are set to transform how information travels with each transaction. This new global standard, which goes into effect in November 2025, aims to streamline payments by unifying the language across borders. Detailed contextual data alongside each payment can shorten transaction times and unlock trapped liquidity.

Addressing fraud and cybersecurity

Fraud and security challenges remain top of mind for all players across the banking industry. Banks have invested heavily in state-of-the-art cybersecurity technology, from AI and machine learning to sophisticated screening tools to help protect their clients from cybercrime and financial fraud.

“We are investing heavily in the technology to address these very real challenges,” noted Hunter. “We see this as a key part of our responsibility so that our clients feel safe and secure when moving their money.”

Flexibility is key: meeting the wide range of needs across the corporate spectrum

Every business will be on its own digital journey when it comes to embracing the innovations that are transforming the cross-border payments space. The connective thread is that the solutions are agile enough to help every business make payments easier and more efficient across the spectrum:

Why an experienced banking partner is essential

To fully leverage the innovative solutions that will make cross-border payments easier, finding the right banking partner will be essential. Two considerations to keep in mind:

Deep local footprint across North and South America: It is essential to find a banking partner with on-the-ground expertise in the regions you operate in to help you navigate the local regulations, requirements, and financial systems. For example, Scotiabank’s full-scale corporate and commercial banking presence in Canada, the U.S., Mexico, the Caribbean, and Latin America allows it to provide specialized advice and insights for clients operating in those markets.
Combining deep experience with new technology: Some banks with legacy systems must rebuild them to take advantage of these new payment innovations, while newer players can adapt quicker to the latest digital solutions. As Scotiabank builds its U.S. cash management capabilities, it can draw on its well-established local banking presence in Canada, Mexico, the Caribbean, and Latin America while establishing a fit-for-purpose cash management arm that leverages the newest innovations for U.S. clients.

What businesses can do to be proactive

The transformation in the global payments industry is here, and businesses that can prepare now will be in a better position to take full advantage of the fast-paced innovations already making cross-border payments faster, transparent, and seamless.

Engage with your banking partner to discuss the implications of ISO 20022 and the innovative solutions in the market.
Assess your banking partner’s technology roadmap and their ability to meet the evolving market requirements.
Analyze your regional operations and ensure your banking partner is set up to help you manage within those local markets.

“It’s such an exciting period for the payments industry and the clients we serve,” says Hunter. “We know that for multinational businesses, the day-to-day management of your treasury is key to your success. We’re committed to working with our clients and being their trusted advisor to help you solve your pain points.”

Reach out to your Scotiabank Relationship Manager to learn about our cash management capabilities and how we can help your business.

Convera, Fintech 2025 Report.

Swift, October 2024.

Cross-border payments causing headaches? A prescription for your pain

Key Takeaways

Addressing fraud and cybersecurity

Flexibility is key: meeting the wide range of needs across the corporate spectrum

Why an experienced banking partner is essential

What businesses can do to be proactive

Achieve impact faster: Smarter, simpler ERP integrations with Scotiabank Connectivity Services

Scotiabank’s state-of-the-art solutions solidify its position as an industry leader

Asia Pacific and Latin America: an emerging pathway of opportunities

Cross-border payments causing headaches? A prescription for your pain

Key Takeaways

1. Speed: lack of real-time status updates

2. Transparency: an incomplete picture across borders

3. Content: a disconnect between the purpose and the payment

Addressing fraud and cybersecurity

Flexibility is key: meeting the wide range of needs across the corporate spectrum

Why an experienced banking partner is essential

What businesses can do to be proactive

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Achieve impact faster: Smarter, simpler ERP integrations with Scotiabank Connectivity Services

Scotiabank’s state-of-the-art solutions solidify its position as an industry leader

Asia Pacific and Latin America: an emerging pathway of opportunities