Cross-border payments: building a hybrid model

Cross-border payments in the age of instant payments

Cross-border payments are undergoing a transformation similar to the one domestic payments experienced a few years ago. Corporates and financial institutions now expect the same quality of service, regardless of the payment destination: fast execution, 24/7 availability, fee transparency, real-time tracking, and predictable settlement.

This convergence of expectations nevertheless presents banks with a complex challenge. While domestic and international payments may appear similar from the client’s perspective, their underlying constraints remain fundamentally different. Cross-border payments involve multiple jurisdictions, currencies, enhanced compliance requirements, screening mechanisms, sanctions controls, and risk management obligations on a scale that has no equivalent in domestic payments. The challenge is therefore to bring the user experience closer to domestic standards while maintaining the highest levels of security, resilience, and compliance for international transactions.

Leveraging existing infrastructures

Rather than building a new global ecosystem, the market is favoring a pragmatic approach that leverages existing infrastructures.

Connected to the Swift network, which remains the world’s largest interbank network, domestic instant payment systems can accelerate the settlement of international payments on certain corridors, notably through instant processing on the beneficiary side. Challenges remain, however, particularly around fee and foreign exchange transparency, especially when foreign exchange is performed automatically during processing to ensure that the payment is executed in the currency expected by the beneficiary. In addition, operating continuously available systems requires banks to adapt their technical frameworks, treasury management processes, and organizations to support true 24/7 operations. At the same time, extended operating hours for real-time gross settlement (RTGS) systems are a necessary complement to bring international settlements closer to permanent availability.

From interoperability to orchestration

After several years focused on interoperability, the market is moving toward a model in which multiple solutions coexist. Instant payments, Swift payments, settlement systems, and, in the future, tokenized services each address specific use cases. Value now lies in payment providers’ ability to orchestrate these different building blocks according to countries, corridors, currencies, regulatory requirements, and client expectations. This evolution also relies on a collective dynamic. Banks involved in EBA Clearing’s Coalition of the Willing and the European Payments Council, including Societe Generale, are actively helping to define the future standards for European instant cross-border payments.

It is this ability to combine several infrastructures and technologies that is gradually shaping a truly hybrid ecosystem for cross-border payments.

Concrete initiatives already underway

Among the key structuring projects is the Swift Payment Scheme. This Swift initiative connects international payments to domestic instant payment systems to deliver greater speed, fluidity, and transparency. Its rollout is gradual, corridor by corridor, with priority given to the highest-volume payment flows. Societe Generale is among the banks strongly committed to this program and plans to be operational by the end of 2026 to improve outgoing payments across several international corridors.

In parallel, the One-Leg Out initiative, led in particular by the European Payments Council and EBA Clearing, aims to process inbound and outbound international credit transfers at Europe’s borders and instantly settle the European “leg” of a euro transaction.

These approaches are complementary: on the one hand, they improve outgoing payments from Europe to major international corridors; on the other, they optimize incoming payments into the SEPA area, which is considered a single domestic area. Timelines vary by geography, investments are significant, and banks must prioritize the most strategic corridors. As a result, these rollouts will still take time, with the most optimistic scenarios pointing to a tangible evolution by the end of 2027. The ambition is nevertheless shared: to offer, in the coming years, a smoother cross-border experience across the main global trade corridors.

Exploring technologies without opposing them

Innovation is, of course, not limited to traditional infrastructures. Stablecoins, tokenized assets, and digital currencies are among the avenues being explored across the industry. Societe Generale, through its subsidiary Societe Generale-FORGE, is notably studying the potential of stablecoins for certain international transaction use cases.

At this stage, however, these solutions have not demonstrated sufficient capacity for industrial-scale deployment across all cross-border payment use cases. They appear more as a complement to existing infrastructures than as an alternative.

Artificial intelligence is also gradually finding its place in the payments ecosystem, particularly in strengthening control processes, improving quality of service, and optimizing transaction processing.

Technology does not replace the human network

In an environment shaped by geopolitical tensions, international sanctions, and rapidly evolving trade corridors, technology, automation, and the promises of AI cannot act alone. Each shift in flows requires routing adjustments, adapted compliance controls, continuous risk analysis, and, at times, “rerouting” decisions based on the political or regulatory context. Recent crises, in Ukraine and the Middle East, illustrate how trade routes change as a result of international tensions, tariff policies, and sovereignty issues. Infrastructures must therefore remain flexible enough to support these transformations. The expertise of payment, compliance, risk, and correspondent banking specialists remains essential to adapt frameworks, secure transactions, and support market developments.

It is this combination of innovation, international cooperation, and human expertise that will enable cross-border payments to reach a new level of maturity, a transformation in which Societe Generale intends to take part alongside the industry, helping to build an increasingly seamless, transparent, and resilient cross-border payments ecosystem.