Cross-border payments
A cross-border payment is a payment where sender and payee are in different countries, which usually adds currency conversion, fees and compliance checks.
Definition
A payment is cross-border when the money leaves one country and arrives in another. For creator payouts this is the normal case: a US agency paying a creator in Germany, or an Austrian brand paying a creator in Brazil.
How cross-border payments work
Traditional cross-border payments travel through a chain of correspondent banks on the SWIFT network. Each bank in the chain can take a fee and add delay.12 Many payout providers hold local accounts in many countries, so the money can often travel as a faster local transfer instead.
Typical costs
- FX spread: the difference between the mid-market rate and the rate you get
- Intermediary bank fees, sometimes deducted from the amount the payee receives2
- Receiving bank fees
- The hidden cost of payments that fail and must be sent again
Compliance
Cross-border payments need sanctions screening and, depending on the country, extra information about the payment or its purpose.1 Some countries have capital controls that restrict how residents can receive foreign currency.1 Tax obligations also depend on where the payee lives, not only on where your business is.
How Talentir helps
Talentir reaches payees in 180+ countries and screens every bank, PayPal and Venmo payout against sanctions lists before it runs. See global payments
Further reading
- Cross-Border Payments: Challenges, Costs, and Best Practices
- How to Pay Creators Internationally: Methods, Costs and Compliance
Related topics
Currency conversion (FX)
FX conversion changes money from one currency to another. The rate and the spread you get decide how much the payee receives.
KYC and KYB
KYC (Know Your Customer) verifies a person's identity. KYB (Know Your Business) verifies a company, its owners and the people who act for it.
Payout methods
A payout method is the rail that delivers money to the payee: bank transfer, digital wallet such as PayPal or Venmo, or stablecoin.
AML (Anti-Money Laundering)
AML rules require financial companies, and some other businesses, to prevent, detect and report money laundering and terrorist financing.