How Cross Border Payments Work on Blockchain

The Stellar network’s blockchain technology facilitates instant and transparent cross border payment settlement across borders with transparency and speed at low-cost.

What are cross-border payments?

Cross-border payments are financial transactions that occur between parties located in different countries. Traditionally, in most B2B transactions, an invoice is issued by the provider of goods/services that specifies payment methods and terms. The service provider decides how they want to be paid and in what currency.

For large payments, international wire via SWIFT is most common. Using this bank-to-bank protocol, the customer will have to work with their bank to make the payment, and the correspondent bank in between will change the currency, decide the foreign exchange rate, and charge their fees.

Challenges with Cross-Border Payments

Millions of businesses worldwide contribute nearly $37 trillion in cross-border payments yearly. Companies of all sizes pay suppliers, employees, other enterprises, and governments to keep their business operations flowing smoothly. However, these payments are costly, time-consuming, and need more transparency.

While most payments are made using SWIFT wire services, several digital companies such as Paypal, Wire, and others have attempted to solve more efficient payments through various payment innovations such as instant payments, ACH, and more. Although improved, the need and challenges to send cross-border payments faster and transparently remain.

Due the friction involved with going in and out of currencies in the developing world, cryptocurrencies were an attractive option for B2B payment flows, providing there was access to crypto, and volatility could be managed.

How is Cross Border Payment Done on the Blockchain

Stellar combines the power of a frictionless, blockchain-based pathway for payments, with local partners to provide on/and off ramps to the world's currencies. The Stellar network can be compared to SWIFT in that it provides a standard protocol that all participants use to communicate in a consistent way. Our local partners, anchors, accept traditional currency from the paying business, and in a single path, value is converted to the destination currency and delivered for payout via a local anchor in the receiver's geography.

The service provider and the buyer can transact in their own local currency without an intermediary bank. In essence, Stellar replaces the international wire and currency conversion process in a single pathway.

Sending Cheaper Global Payments Using Stellar

The Stellar network’s blockchain technology offers an accessible alternative to anyone looking to send payments globally. By offering an extensive network of on- and off-ramps, the Stellar ecosystem especially brings a unique advantage to those serving emerging and developing markets where the costs to transact can be higher than global remittances estimated by the World Bank.

Stellar meets the need for speed and efficiency with blockchain technology.



Stellar has a consensus that allows the process to happen in seconds, compared to the traditional cross-border payments that can take up to 5 business days to settle.

Low Cost

Low Cost

The average transaction cost using Stellar is .000002 XLM with no transaction fees.



This exists on a public blockchain and is visible on a public ledger

Use Cases for Blockchain Payments

In a global economy, payments are sent around the clock and more urgently than ever to meet various immediate and short-term needs. The efficiency of blockchain payments solves these needs and many more.

Social Payouts

Issue partial and full payments for grants, aid, and government services.

Enterprise Payouts

Reconcile corporate payouts without pre-funding accounts.

Supplier Payouts

Invoice suppliers and other enterprises without pre-funding accounts.

Stellar Anchors Power Cross Border Payments

The Stellar network combines the power of a frictionless, blockchain-based pathway for payments with local partners to provide on- and off-ramps to the world’s currencies. These partners, called Anchors, move value on the Stellar network while accepting and paying out traditional currency in their local geography.

Both service providers and recipients can transact in their own local currency without the need for an intermediary bank. Anchors, which are optimized for interoperability with the Stellar network, combine international wire and currency conversion in a single pathway.