Cross-border B2B payments: The basics explained (2025)

Managing payments across borders has become a standard practice. Whether you're paying international suppliers, receiving customer payments in multiple currencies, or coordinating subsidiary flows, chances are you're moving money internationally to some degree.

But business-to-business (B2B) cross-border payments come with operational complexity:

• Hidden fees
• Unpredictable timing
• Limited visibility
• Currency risk that chips away at margins

Understanding how these payments work (and what pathways exist beyond traditional banking) can give you better control over costs, cash flow, and operational efficiency. In this guide, we'll cover the core mechanics that power international B2B payments, cost structures, key challenges and how modern platforms solve problems traditional banks struggle with.

Let's get started.

Why understanding cross-border payments matters for your business

The cross-border payments market is massive and growing fast. According to FXC Intelligence, cross-border payments volumes reached $194 trillion in 2024 — and the trend shows no signs of slowing as businesses source globally and expand into new markets. FXC Intelligence projects volumes will hit $320 trillion by 2032.

And when you're moving significant international business payment volumes across borders, how you handle those transactions directly affects your margins, cash flow predictability and operational efficiency.

A 2022 Mastercard survey also revealed how COVID pushed companies toward international trade:

• 65% of businesses found new options for international supplier relationships
• 59% located more competitive suppliers in foreign markets
• 46% reduced operational risk through cross-border supplier relationships

But without a proper understanding of how B2B cross-border payments actually work, you're likely overpaying through hidden FX spreads, losing days of working capital to slow settlement times, and making financial decisions without visibility into where your money actually is.

How do B2B cross-border payments work?

Moving money internationally means navigating multiple banking systems, regulatory frameworks and dealing with currency conversions — complexities you don't face with domestic payments.

Payment networks that power cross-border transactions

Two main international payment networks handle most B2B cross-border payments: SWIFT and SEPA.

SWIFT (Society for Worldwide Interbank Financial Telecommunication) links over 11,500 financial institutions worldwide and handles roughly 45 million payment messages each day across every currency pair.

SEPA (Single Euro Payments Area) works across 40+ European countries but only processes euro-denominated transfers. It moves faster, typically settling within one business day compared to SWIFT's multi-day timeline.

The role of correspondent and intermediary banks

If your bank or payment provider doesn't have a direct relationship with the recipient's bank, your payment gets routed through intermediary banks (also called correspondent banks) that serve as connectors between the two systems.

Your payment bounces through this chain of intermediaries — each one processing the transfer and sending it to the next stop until it reaches the final destination.

For example, a USD payment sent from Germany to Japan might pass through banks in Europe and the United States first, depending on which institutions have existing relationships.

Currency conversion when multiple currencies are involved

Most cross-border payments require a conversion or currency exchange at some point between when you send the payment and when the recipient receives it.

The exchange rate at which your currency is converted fluctuates all the time. And when you take into account any spreads or markups applied by your payment provider, it can be tough to predict final costs. This becomes even more difficult when you're managing payments through a bank or provider that doesn't provide transparent exchange rates and spreads before you commit to the transfer.

What costs are associated with B2B cross-border payments?

The total cost of moving money across borders involves multiple fees that aren't always visible before you hit send — which makes it tough to predict what you'll actually pay.

Exchange rate spreads and markups

The spread is the gap between the mid-market exchange rate (what you see on Google or financial news sites) and the rate your bank or provider actually gives you.

How big is that gap? Traditional banks often apply spreads of 4-6% on top of the mid-market rate. On a €100,000 payment, that's €4,000 or even €6,000 disappearing from the exchange rate markup alone. They also tend to charge monthly account maintenance fees for business accounts with international transfer capabilities — adding another layer of cost on top of the per-transaction charges.

Some specialised cross-border payment providers offer rates much closer to mid-market — and they show you the exact spread upfront before you commit to the transfer.

Over time, the difference between transparent, competitive rates and opaque bank fees can represent thousands in unnecessary costs, especially when you're handling significant international payment volumes.

Transaction and intermediary bank fees

Exchange rate spreads aren't the only costs hitting your payments. You're also dealing with direct transaction fees from multiple sources:

• Your bank charges processing fees — often €15-€50 per transaction for SWIFT payments, plus percentage-based fees on the transfer amount.
• The recipient's bank often charges similar fees.
• Each correspondent bank along the chain takes its fee too (often undisclosed upfront or at all).

Can you avoid or reduce these fees?

While you won't always be able to avoid intermediary bank fees, you can reduce the amount you pay in transaction fees and FX markups. The key thing to look for is a payment provider with transparent fees, such as iBanFirst.

Instead of hiding the FX spread, they'll tell you exactly what you can expect to pay (and it's often far less than a traditional bank). And with iBanFirst, you won't have to pay any recurring monthly subscription fees.

Understanding the complete fee structure (not just the quoted transfer fee) matters when you're calculating the true cost of each payment option and comparing providers accurately.

Key challenges that complicate B2B cross-border payments

Beyond the mechanics and costs we've covered, cross-border payments create operational challenges that affect how you manage cash flow, maintain supplier relationships, and protect your margins.

Currency volatility and exchange rate risk

Exchange rates shift constantly due to political events, economic policy changes, and market uncertainty. Even small movements can significantly impact what you pay or receive.

What does that mean in practice? Currency movements can completely erase your planned profit margins if you aren't proactive. Without an FX risk management strategy, you're essentially gambling on currency movements. Invoice a customer today, they pay 90 days later — after rates shift, meaning you receive less than expected. And the same risk exists with outgoing supplier payments when fixed-price contracts are negotiated months in advance.

Processing delays that disrupt cash flow

Cross-border payments can take anywhere between five minutes and five days to settle. That delay can be a major disruption when you have supplies sitting on a dock waiting for the payment to clear.

iBanFirst's 2025 international payment speeds report found that 64% of payments to the US and UK arrive in under 2 hours, but only 12% of payments to China (the top destination for European business payments) settle that quickly. A USD payment to China can take 24 hours or more as it waits for intermediary banks in different time zones to open and process the next leg.

Which means you can't treat all international payments the same.

Timing your payments strategically becomes critical. Payments initiated by 10am during the week — particularly on Mondays and Wednesdays — have significantly higher chances of same-day execution, while Friday afternoon payments sit idle through the weekend.

When you can't predict exactly when suppliers receive payment or when customer payments land, cash flow planning becomes guesswork instead of strategic management.

These delays strain supplier relationships and for businesses with tight working capital, even a few days locked up in the payment process creates real operational constraints.

Limited visibility into payment status

Once you initiate a payment through traditional banks, it essentially disappears into the void. International payment tracking might mean a reference number but no real insight into where your money is or when it will arrive.

What happens when a supplier asks about their payment? Chances are, you'll have to contact the bank with your reference number just to get basic status information.

How modern cross-border payment solutions solve these problems

Some specialised payment providers address these core frustrations by building platforms specifically designed for international business payment needs.

Multi-currency accounts that give you control over timing

Instead of converting every transaction through your base currency, some providers let you hold funds in multiple currencies on a single platform — keeping euros as euros, dollars as dollars, and so on.

Why does that matter? You control when — or if conversion happens — not your bank dictating timing based on when payments arrive. This gives you strategic flexibility; wait for exchange rates to move in your favour, hold funds in a foreign currency for anticipated future payments, or skip unnecessary conversions entirely.

For example, if you're working with iBanFirst, you can receive cross-border payments from a US customer in USD and use those same funds to pay a supplier — no double conversion eating into your margins.

For businesses with recurring international operations, this approach significantly reduces conversion costs and lets you optimise FX timing based on actual market conditions rather than payment schedules.

Plus, multi-currency accounts enable you to consolidate all your currency positions in one place with clear visibility into your current cash holdings and total exposure across your operations.

Transparent pricing you can see upfront

Some providers show you exactly what you'll pay for each transaction, including all transaction fees and spreads. This eliminates surprise costs. You know the total cost before executing, not after.

When you see actual costs side-by-side, you make informed decisions about timing and routing. Clear pricing enables accurate forecasting as well, since you're building budgets and forecasts on the back of known costs rather than estimates. For example, if you're working with iBanFirst, what you see is what you pay.

Of course, not all cross-border payment providers are as transparent on their fees as we are, so if clear pricing is a priority, iBanFirst may be the ideal fit.

Real-time tracking for complete visibility

With iBanFirst, you'll have access to real-time payment tracking. Just like tracking a package, you see exactly where each payment is in the settlement process.

What does this solve? You can see when the money leaves your account, which intermediary banks it passes through, and when it gets credited to the recipient.

Plus, you can share tracking links with your beneficiaries, so everyone is in the loop at all times. Both payers and payees can check statuses independently, eliminating the back-and-forth trying to confirm where your funds are.

Real-time tracking also enables proactive management. You can spot delayed payments immediately instead of discovering problems days later when a supplier calls asking where their money is. Complete visibility improves cash flow forecasting, reduces time spent tracking down status, and strengthens business relationships through transparent settlement.

Forward payment contracts that protect your margins

Some providers offer forward payment contracts so you can lock in exchange rates for future payments — removing currency risk from your financial planning.

Why does this matter?

When you know you'll need to pay a supplier $50,000 in three months, you can lock in today's rate now. You get cost certainty regardless of how rates move.

It's less about finding the absolute best rate possible and more about predictability. If you know exactly what you'll pay, you can forecast more effectively, protect budgeted margins, and build financial plans you can trust.

With iBanFirst, you'll have access to FX risk management tools and support from real human FX experts (without huge minimums or complex derivatives knowledge).

Take control of your international payments with iBanFirst

Cross-border B2B payments don't have to mean hidden costs, unpredictable timing, and zero visibility. For small to medium multinationals (SMMs), iBanFirst delivers on all of the most important elements of the international payments process we've covered above.

With iBanFirst, you can:

• Hold funds in 25+ currencies with a multi-currency account (and control when conversions happen)
• Send and receive cross-border payments with transparent pricing and flexible speed options
• Lock in exchange rates for future payments with forward payment contracts
• Track payments in real-time from initiation through settlement

You get clear FX spreads shown upfront, direct access to human FX specialists who understand your business context, and no recurring monthly fees.

Open an account to start managing your cross-border payments with the transparency, speed, and control that traditional banks struggle to deliver.