A software company in Austin hires a design studio in São Paulo and has to pay its first invoice in Brazilian reals. Its bank offers a wire transfer, quotes a fee and cannot say exactly when the money will arrive. What are cross-border payments, and how do they work?
A cross-border payment is a transfer of money between a payer and a payee in different countries, usually with a currency conversion along the way. It travels over one of three main routes, correspondent banking through SWIFT, local payment rails in the destination country or stablecoins on a blockchain, and each route has its own cost, timing and requirements.
What is a cross-border payment?
A cross-border payment is any transfer in which the payer and the payee are in different jurisdictions. For companies, that covers paying suppliers and contractors abroad, collecting from international customers, funding subsidiaries and moving treasury between entities.
Most cross-border payments have four parts: the payer, the payee, the institutions that move the money and a foreign exchange (FX) conversion. In Brazil, every conversion between reals and a foreign currency is an FX operation regulated by the Central Bank of Brazil (BCB) under Law 14,286, of December 29, 2021.
How does a cross-border payment work, step by step?
1. Initiation
The payer instructs its bank or payment provider with the amount, the currency and the payee's details.
2. Currency conversion
The source currency is converted into the destination currency. The rate the payer gets includes a spread over the market rate.
3. Transit
The money moves through intermediaries: correspondent banks, a local partner in the destination country or a blockchain network.
4. Settlement and crediting
The payee's institution credits the account in local currency. In Brazil, the incoming funds go through an FX operation and reach the payee through domestic rails such as Pix.
What are the main rails for cross-border payments?
1. SWIFT and correspondent banking
Banks exchange payment messages over the SWIFT network, and the funds move through accounts that banks hold with each other. Each intermediary in the chain can deduct a fee, and the payment can take more than one business day depending on the corridor and cut-off times. The trade-offs are covered in SWIFT vs. blockchain for international payments.
2. Local payment rails
A provider with liquidity in the destination country receives the funds and pays the recipient in local currency through domestic systems. In Brazil, that usually means Pix, the Central Bank's instant payment system, which credits accounts in seconds, 24/7.
3. Stablecoins and blockchain
A stablecoin such as USDC or USDT moves on a blockchain 24/7 and is converted into local currency at each end. In Brazil, since February 2, 2026, international payments with virtual assets and the purchase, sale or exchange of stablecoins are FX market operations (BCB Resolution 521). More on this route in how stablecoins are transforming international payments.
Rail | How the money moves | Where it helps | What to watch |
|---|---|---|---|
SWIFT and correspondents | Bank messages and correspondent accounts | Wide reach between banks | Intermediary fees, cut-off times, limited tracking |
Local rails | Provider pays out in local currency from local liquidity | Fast, predictable crediting for the recipient | Depends on the provider's corridors and licenses |
Stablecoins | Tokens transferred on a blockchain, converted at each end | Transfers 24/7, including weekends | FX rules at each end, compliance and counterparty checks |
What drives the cost and timing of a cross-border payment?
FX spread: the difference between the rate offered and the market rate.
Fees: sending, intermediary and receiving charges.
Taxes: in Brazil, IOF on FX operations (0.38% on most inflows, 0% on export revenue).
Cut-off times and time zones, which can push a payment to the next business day.
Compliance checks and documentation on each side.
These frictions are why the G20 set targets for 2027: an average cost of no more than 1% for retail cross-border payments, which include B2B, and 75% of them available to the recipient within one hour of initiation, according to the Financial Stability Board's targets report.
How can one integration cover several corridors?
Companies that pay in many countries often end up with a different bank or provider for each corridor, each with its own onboarding, file format and reconciliation. Networks that combine banking rails, local payout partners, blockchain networks and liquidity providers let a company reach several corridors through one integration, with the route chosen for each payment.
Moving money across borders every month? See how one integration can cover several corridors.
What does a cross-border payment to Brazil look like?
A company in the United States pays USD 20,000 to a software supplier in Brazil. The figures below are illustrative.
The company sends USD 20,000 to its provider.
The provider converts USD to BRL. At an illustrative rate of BRL 5.40 per dollar, that is BRL 108,000 before the provider's spread and fees.
On the Brazilian side, the inflow is an FX operation. Because the payment is export revenue for the supplier, the IOF rate is zero; other inflows pay 0.38%.
The supplier receives the reals in its Brazilian account, for example through Pix, and both sides get a confirmation.
How does Transfero process cross-border payments?
Transfero runs cross-border payments on the Transfero Payments Network (TPN), a layer that connects banking rails, blockchain networks and liquidity providers through a single API. For companies with flows into and out of Brazil, the same integration covers collections and payouts in BRL. The network serves fintechs, global payroll platforms, marketplaces, payment service providers, international trade companies and exchanges, and includes a trading desk. Companies connect once and use the same API to pay and collect in different countries and currencies, with settlement in local currency on the recipient's side.
Cross-border payments: move money globally in minutes, with predictable 24/7 payouts across multiple countries.
More than 180 payout markets.
Collection and payment in BRL through Pix.
More than 9.8 million transactions processed in 2025.
Questions to ask before choosing how to send cross-border payments
Which corridors and currencies do you need today, and in a year?
What is the full cost per payment, including the FX spread and intermediary fees?
How long until the recipient has the funds, and can you track each payment?
Which taxes apply on each side, such as IOF in Brazil?
What documentation does each payment require?
Does your provider settle in local currency on the recipient's side?
Can stablecoins be part of the flow under each country's rules?
Talk to our team about your cross-border payment flows: contact Transfero.
Frequently asked questions
How long does a cross-border payment take?
It depends on the rail and the corridor. Correspondent banking can take more than one business day, while local payouts and stablecoin transfers can credit faster, subject to cut-off times and compliance checks. The G20 target for 2027 is for 75% of retail cross-border payments to reach the recipient within one hour.
Is there a tax on payments into Brazil?
Yes. Brazil charges IOF on FX operations: 0.38% on most inflows and 0% on export revenue. Outflows from Brazil, including payments for services, pay 3.5%, while payments for imported goods are exempt. These rates were checked against the official decree on October 1, 2026.
What is the difference between a cross-border payment and a remittance?
A remittance usually refers to money individuals send to family abroad. Cross-border payments is the broader term and includes business flows such as supplier payments, payroll, customer collections and treasury transfers between entities of the same group, which usually involve larger amounts and more documentation.
Can companies use stablecoins for cross-border payments in Brazil?
Yes, through authorized institutions. Since February 2, 2026, international payments with virtual assets and the purchase, sale or exchange of stablecoins are FX market operations under BCB Resolution 521, so FX rules, documentation and limits apply to them. Companies should confirm that their provider is authorized and how each leg of the payment is documented.
