Mastering Cross-Border Payments: A Global Payouts Playbook

Research confirms that the majority of cross-border payment management practices are not efficient from both a cost and time perspective. Businesses’ current practices often result in reduced productivity, increased labor, expensive payment fees, and hindered relationships with suppliers.

Managing international payments isn’t just a back-office challenge—it’s a business-critical operation. Whether you’re paying freelancers, creators, vendors, or partners across the globe, streamlining your cross-border payments process is key to scaling efficiently, staying compliant, and keeping your payees happy.

In this guide, we’ll walk through what cross-border payments are, the common pitfalls to avoid, and how leading digital businesses automate global payouts with Tipalti.

What Are Cross-Border Payments?

Cross-border payments are financial transactions between entities in different countries, involving currency exchange, varying regulations, and multiple banking partners. They power the payout engines behind creator platforms, adtech networks, online marketplaces, and global SaaS providers.

But without automation and compliance baked in, these transactions become costly, slow, and error-prone.

Cross-border B2B payments were $165 trillion in 2024, according to McKinsey & Company. 

Why They’re So Complex

Cross-border payments are complex because payment regulations, transfer systems, identifying numbers, banking systems, currencies, and fees vary significantly from one country to another. In some less-developed countries, banking systems are not as advanced.

Cross-border payments often involve currency conversion, and foreign exchange (FX) rates are subject to fluctuation. Financial intermediaries may be required to complete transactions. 

It’s important to understand how the step-by-step process of sending cross-border payments works. Let’s walk through it. 

Steps to Sending Cross-Border Payments

With cross-border international payments, extra steps and factors must be considered beyond basic steps for domestic payment processing. The following 10 steps for sending cross-border payments include factors unique to cross-border transactions. 

1) Purchasing

When sourcing globally, you will find an international supplier you want to purchase from. If you’re buying online through eCommerce, you’ll be directed to the payee’s checkout page to make your B2B payment. If you’re buying over the phone, a sales representative will conduct the checkout process. Either way, you’ll be presented with payment options for your B2B purchase.

Ideally, if you’re buying online, the checkout page will offer a localized experience, meaning it features your native language. and will hopefully offer local payment methods that you are familiar with. 

2) Preparing for Cross-Border Payments

When sending cross-border payments, you’ll need to provide specific information based on the recipient country. Additionally, not all payment methods are supported globally. For instance, even if you use Global ACH for most payments, you may need alternative methods for recipients in countries where ACH isn’t supported.

Here are a few country-specific examples:

• China: Payee’s telephone number required for Global ACH
  
• Ukraine: Tax ID number required
  
• United Kingdom: SORT Code needed
  
• Most European countries: IBANs required for SEPA ACH
  
• Various countries: BIC/SWIFT code may be necessary

Simplify Onboarding with a Global Payables Platform

A global payables platform streamlines the onboarding process by allowing payees to input their payment preferences and banking details directly. This creates a centralized, secure record for each payee, making it easier to manage compliance and reduce manual entry errors.

Take Advantage of Early Payment Discounts

Ask suppliers or payees about early payment discount options when setting up cross-border payments. In a recent study, 40% of companies reported receiving discounts between 1% and 10% from suppliers. If you qualify for these discounts, use prioritization tools within your global payments platform to ensure timely payments to those vendors.

3) Verifying Compliance with Global Payment Rules

Verify that you are sending the payment, following all applicable global payment rules. There are more than 26,000 rules, which makes the use of an automated global payments solution all the more valuable. Can you imagine if your AP department had to check each cross-border payment against that many factors? With a global payments service provider that understands the payments industry, your AP team can focus on core AP tasks, rather than on verifying global compliance.

4) Monitoring and Oversight of Global Payments Status

Sending international payments requires maintaining complete oversight of each payment. When making hundreds or thousands of international money transfers, achieving complete oversight can be time-consuming. Using a global payments platform gives you a single platform to view the status of each payment, providing an effective user experience. Instead of checking each payment individually for reconciliation, you can filter them according to ones that are past due or have yet to be reconciled. From there, you can use invoice automation and mass payments tools to see who is responsible for approving the payment and why it hasn’t been approved.

5) Routing and Processing

Ensure Smooth Payment Authorization

Once payment details are entered, the transaction is sent through an encrypted gateway for authorization. However, if your global payments platform is connected to only one bank, the transaction may be flagged. Using a platform integrated with multiple global banking partners increases the likelihood of successful, first-time payment processing.

Automate One-Time and Recurring Payments

Whether you’re paying publishers, creatives, or suppliers, a global payments platform can automate both one-time and recurring transactions—reducing manual effort and errors.

Leverage Recurring Payments for Discounts

For regular payees, setting up recurring payments can help you negotiate better pricing terms and ensure timely delivery—supporting stronger vendor relationships and reducing the risk of payment delays.

Protect Business Continuity with Timely Payments

Prompt payments to freelancers and affiliates help prevent churn and reduce recruitment costs. Similarly, paying suppliers on time helps avoid shipment holds and production delays caused by unpaid invoices.

6) Payment Approval or Denial

Your payment will be approved or declined. Verification takes place to ensure you have sufficient funds in your account, and if necessary, a currency conversion will take place at the current exchange rate. This applies only if you are sending USD to an account that accepts a different currency and the payee has requested a different currency.

Hopefully, the cross-border payment is using banks that support international trade by using international payments. If so, the transaction is more likely to be approved. A global payments platform excels in intelligently routing the payment through a bank that is most likely to approve the transaction.

7) and 8) Confirmation (Approval or Denial) and Fulfillment

You will receive confirmation that the transaction has been approved or declined. If declined, you’ll receive a return code outlining why it wasn’t processed. If approved, your order then goes into fulfillment.

9) Settlement

At this point, depending on the type of cross-border payment you’ve used, there’s a good chance the funds will still appear in your account and not in the payee’s. A Global Automated Clearing House (ACH) payment takes anywhere from two to five days to reconcile.

10) Tracking

You will receive a reconciliation report from each bank that you work with. This can be extremely confusing and is an inefficient way to keep track of your cross-border payments. With a global payments platform, you can receive a consolidated reconciliation report showing all payouts through all banks and which transactions have been reconciled, as well as which ones have not.

Cross-Border Payment Pitfalls and Costs

Pitfalls or challenges of cross-border payments include:

1. Manual payment workflows and siloed systems
2. Poor payee experience
3. Regulatory risk and tax complexity
4. Limited visibility into payouts

1)  Manual Payment Workflows and Siloed Systems

Manual processes, spreadsheets, and siloed, fragmented systems often result in bottlenecks, payment delays, duplication of efforts, and rising overhead costs, with no scalability for growth. 

2) Poor Payee Experience

Creators, affiliates, and freelancers expect fast, timely, and accurate payouts. A poor payout experience could lead to payees leaving, resulting in extra time needed to recruit replacements, as well as reputational damage.

3) Regulatory Risk and Tax Complexity

Compliance with OFAC and AML, FATCA, DAC7, and local tax requirements is increasingly complex as your payee network expands globally.

4) Limited Visibility into Payouts

With manual or siloed systems, payers and payees have limited visibility for cash flow, liabilities, and payment status.

Costs of cross-border payments include payment method fees, currency exchange fees, sending and receiving bank charges, intermediary fees, and any investigation fees for tracing payments not received. Potential payment fraud initiated by scammers is an additional cost that companies may incur on cross-border payments. 

Choosing a Global Payout Partner

Choosing the best cross-border payment provider is crucial. Your ideal solution should offer:

• Global functionality meeting payee needs: Payouts to 200+countries and territories, 120+ currencies, and 50+ payment methods
• Regulatory and tax compliance: Built-in tax compliance across the US with a KPMG-approved engine, UK, EU, and Canada, and compliance with sanctions, KYC, and AML requirements
• Outstanding payee experience: Self-service onboarding with multilingual support in 27 languages, with a payment method choice and real-time payout status visibility
• Integration flexibility: Seamless API and ERP integrations with ERP and accounting software like NetSuite, Xero, QuickBooks Online, and Sage Intacct, and performance marketing systems for payouts
• Automation with scalability: Eliminate 80% of your payout workload through end-to-end payables and payouts automation

How Leading Companies Simplify Global Payouts

Choose an automated global payments platform that includes:

• Mass payment processing
• Integration with algorithmic banking rules
• Advanced payment configuration options and thresholds
• Automatic OFAC and other global regulatory compliance

Mass Payments Processing

To maximize the benefits of cross-border payments, choose a global payments platform that supports mass payment processing. You’ll be able to schedule thousands of payments in a batch with multiple payment methods. Additionally, consider a solution like Tipalti, which supports payments to over 200 countries and territories in 120 different currencies. Imagine being able to partner with any overseas affiliate, creator, or freelancer and pay them through your payment provider in their local currency. This type of payment processing is at the heart of enterprise scalability.

Integration with Algorithmic Banking Rules

No matter the platform you choose, ensure it integrates the 26,000-plus commercial banking rules when processing payments. This will ensure payments are processed quickly and reduce errors by 66%. 

Advanced Payment Configuration Options and Thresholds

Your global payments platform should feature advanced payment configuration options through which you can split transaction fees between you and the payee. Additionally, payment threshold features can give you the ability to hold payments until a predetermined margin is reached, optimizing your margins on transactions and improving your cash flow.

Automatic OFAC Regulatory Compliance

A global payments platform worth partnering with will guarantee complete OFAC compliance. Regulatory screening can be a headache, but it must be performed once suppliers provide you with their banking details. With a global payments platform, there is no need to conduct a manual query on SDN/OFAC databases. Instead, the global payments platform can do the screening for you and check all payees against blacklists. This reduces the risk of fraudulent or prohibited payment activities and stops losses caused by payment errors. It also keeps you from criminal liability in regard to doing business with a supplier who is on the OFAC’s sanctions blacklist.