Companies that operate beyond the borders of their country inevitably need to deal with a central issue: how to send and receive money internationally efficiently.
These operations are known as cross-border payments: financial transfers made between different countries, currencies, and banking systems.
Although the concept is simple, the execution is far from it.
In practice, cross-border payments involve a combination of currency exchange, international banking infrastructure, regulation, and technology, which directly impacts three critical factors for any company:
Cost of the operation
Settlement time
Predictability of the final amount
If you want a broader view of how companies can optimize these operations, be sure to also check out our complete guide to international payments for companies.
What characterizes a cross-border payment
A payment is considered cross-border whenever it involves the movement of funds between different countries.
This includes situations such as:
Payment of international suppliers
Sending funds between subsidiaries
Hiring services abroad
Payment of professionals outside the country
Import and export operations
The key point is that these transactions require currency conversion and integration between different financial systems, which increases the complexity compared with local payments.
How cross-border payments work in practice
To understand why these operations can be expensive or time-consuming, it is important to observe how they work in practice within traditional infrastructure.
When a company sends an international payment through a bank, the transaction normally follows an indirect flow — that is, the money does not go directly from the originating bank to the destination bank.
Instead, it passes through a network of intermediary institutions.
1. Origin: sending the payment order
The company requests the transfer from the bank or financial institution.
2. Currency conversion
The amount sent is converted from the source currency to the destination currency. Here is where one of the main cost factors occurs: the foreign exchange spread.
3. Bank intermediation
The transfer is routed through a network of correspondent banks.
Depending on the destination, the transaction may pass through more than one intermediary, which directly affects cost and timing.
4. Settlement at the destination
After passing through the chain of intermediaries, the amount reaches the beneficiary's bank.
This process, when carried out by traditional institutions, usually takes two to five business days, and may vary depending on the transfer route.
What costs are involved in cross-border payments
One of the biggest challenges for companies is understanding the real cost of these operations. In practice, an international transfer involves multiple layers of cost.
Exchange rate spread
It is the main source of cost and can vary significantly between institutions.
Bank fees
Administrative fees charged for executing the transaction.
Intermediary banks
Additional costs applied throughout the process, often without full transparency.
IOF - Tax on financial transactions
In Brazil, depending on the transaction, IOF may be levied on the amount transferred.
This set of factors explains why companies often pay more than expected, a topic we explore in more depth in our content about how much an international transfer costs for companies.
Why are cross-border payments still inefficient?
Despite the digitization of the financial system, international payment infrastructure still presents important limitations.
The main points of inefficiency include:
Dependence on multiple intermediaries
Unstandardized processes between countries
Low settlement speed
Lack of transparency in the final cost
These limitations have led companies to seek more modern alternatives.
A new way to make cross-border payments
In recent years, a new approach has begun to gain ground: the use of virtual assets and stablecoins as settlement infrastructure.
This new technological layer makes it possible to simplify international payment flows, reducing intermediaries and increasing efficiency.
If you are still not familiar with this concept, it is worth understanding better what stablecoins are and how they work, since they play a central role in this transformation.
The role of stablecoins in international payments
Stablecoins are digital assets whose value is pegged to fiat currencies, such as the dollar.
They allow digital transfers with:
Value stability
Global liquidity
High speed
In practice, they work as an intermediate layer that facilitates the movement of value between countries.
The flow can be structured as follows:
Conversion of local currency into stablecoin
Digital transfer
Conversion to local currency at the destination
This model reduces complexity and improves the efficiency of the operation.
On-ramp and off-ramp: connecting the financial system
To make this structure viable, two important concepts come into play:
on-ramp: conversion of fiat currency into a digital asset
off-ramp: conversion of the digital asset into fiat currency
This process allows companies to use this infrastructure without needing to deal directly with crypto assets.
If you'd like to better understand how this conversion works in practice, also check out our content on how to convert USDT to Brazilian real.
How does Azify use this new infrastructure
Azify uses this approach to simplify international payments.
The platform combines banking infrastructure, virtual assets (such as stablecoins), and API technology to allow companies to make cross-border payments more efficiently.
In practice, the company sends a payment order as usual, while Azify uses this infrastructure to reduce intermediaries, speed up settlement and increase the predictability of the final amount
All of this without requiring the client to deal directly with cryptocurrencies.
The future of cross-border payments for businesses
The international payments market is undergoing a significant transformation.
As new technologies gain adoption, cross-border payments tend to become:
Faster
More predictable
More integrated
Less dependent on intermediaries
Companies that adopt these new infrastructures will achieve clear gains in operational efficiency.
Modernize your international payments
If your company makes international payments frequently, you’ve likely already faced challenges related to cost, timing, and predictability.
Today, there are already more efficient alternatives for making cross-border payments.
Azify offers an infrastructure that combines technology, virtual assets, and API integration to simplify international transfers.
