In today’s hyper-connected economy, global commerce has evolved dramatically. Consumers can order goods from halfway across the world with a few taps, and businesses are sourcing materials and talent across borders more than ever before. This borderless economy has made the world feel smaller – yet the global payment systems that support it are still lagging.
Despite decades of innovation in other areas of finance, cross-border payments remain slow, expensive, and opaque. A key reason lies in the outdated correspondent banking model, where money moves across a chain of intermediary banks before reaching its destination. Each link in that chain adds cost, complexity, and risk – and often lacks transparency, creating headaches for businesses and their finance teams.
Interoperability is the crux of the issue. Global correspondent banking networks were never designed for instant, seamless payments. They operate on different technologies, standards, and settlement timelines. Many rely on batch processing, limited operating hours, and legacy infrastructure. This lack of synchronisation makes it difficult to track real-time payments, manage liquidity effectively, or respond to compliance issues confidently.
A Brief History of Instant Payment Schemes
Instant payment schemes are making cross-border payments more efficient by enabling near real-time settlement, reducing the traditional delays of several days. These systems operate 24/7, allowing transfers across time zones and public holidays, which is particularly beneficial for global businesses and consumers needing quick access to funds.
They also help lower transaction costs by reducing the number of intermediaries involved, as many schemes are now being linked directly between countries. This results in simpler, faster, and often cheaper transfers. Enhanced transparency through real-time tracking and standardised data formats (like ISO 20022) further improves efficiency and reconciliation.
Faster Payments (UK)
Launched in 2008, Faster Payments was one of the world’s first real-time payment systems. Developed by the UK banking industry, it enabled near-instant domestic bank transfers, 24/7, all year round. The system significantly improved the speed of online and mobile banking transfers, replacing the traditional three-day Bacs process for many use cases. It paved the way for similar schemes globally and remains a key infrastructure in the UK payments landscape, with volumes growing steadily each year.
SEPA and SEPA Instant Credit Transfer (Europe)
The Single Euro Payments Area (SEPA), established by the European Payments Council, was designed to harmonise Euro payments across Europe. It enables fast and secure credit transfers, direct debits, and card payments under unified standards.
SEPA Instant Credit Transfer (SCT Inst) was launched in November 2017, enabling Euro credit transfers in less than 10 seconds, up to a maximum amount per transaction. Initially optional, SCT Inst is becoming a de facto standard for instant euro payments.
In 2024, the EU introduced new rules mandating that all banks and payment service providers in the eurozone offer SEPA Instant. Under the new regulations:
- Instant payments must be processed within 10 seconds, 24/7/365.
- Pricing must not exceed that of regular SEPA credit transfers.
- Enhanced fraud prevention and IBAN/name verification checks are now required. This regulatory push aims to ensure the widespread adoption of instant payments across the Euro area in 2025.
Other Key Schemes Worldwide
- TIPS (TARGET Instant Payment Settlement): Operated by the European Central Bank since 2018, TIPS settles SCT Inst payments in central bank money, supporting pan-European instant payments.
- PIX (Brazil): Launched by the Central Bank of Brazil in 2020, PIX enables real-time payments between individuals and businesses, revolutionising digital finance and drastically reducing cash dependency.
- RTP (US): The Real-Time Payments system, developed by The Clearing House, went live in 2017. It enables instant transfers and rich data exchange for participating banks.
- FedNow (US): A complementary system to RTP, FedNow launched in 2023 as a government-backed alternative offering 24/7 instant payments across financial institutions.
- NPP (Australia): The New Payments Platform launched in 2018, offering instant payments with overlay services like PayID for easy addressable transfers.
- UPI (India): Unified Payments Interface, launched in 2016, has become one of the world’s most successful real-time payment systems, supporting billions of transactions monthly.
Closing the Gap in Cross-Border Payments
At Banking Circle, we believe cross-border payments should be as frictionless as sending money domestically. By connecting directly to local clearing systems and bypassing the traditional correspondent model, we make it possible to move money across borders with the speed, cost-efficiency, and transparency that modern businesses demand.
Michael Boel, Head of Clearing and Product Execution at Banking Circle, explains how this fragmented ecosystem is preventing global merchants from reaching their full potential.
“E-commerce and global logistics have become faster and more flexible than ever – you can order a shirt in Hong Kong and have it delivered overnight. But payments haven’t kept pace. The infrastructure is still complex, expensive, and riddled with intermediaries. For merchants, that means high costs and, too often, not even receiving the full amount.”
For businesses, this results in increased costs – often passed on to consumers – which makes their offering less competitive, along with avoidable delays that hinder efficiency.
The explosion of e-commerce and international sourcing has driven demand for fast, seamless payments, yet legacy infrastructure has struggled to adapt. Traditional cross-border payments are burdened with high fees, lengthy settlement times, regulatory challenges, and a lack of transparency.
Payments should be as agile as the businesses they serve, yet today’s fragmented systems often fall short. The challenge is not just speed, but also visibility, cost, and control, especially for businesses managing treasury across multiple regions.
Making Global Payments Feel Local
Banking Circle is addressing this challenge head-on by building strong, direct relationships with central banks, regulators, and clearing houses around the world. Our approach transforms cross-border payments into local transactions.
This means businesses can benefit from accessing instant payment schemes like Faster Payments in the UK, TIPS in Europe, FedNow in the US, NPP in Australia, and SEK RIX-Instant in Sweden.
“By establishing relationships globally with both regulators and central banks and clearing houses, Banking Circle makes the global payments local. Instead of trying to optimise or trying to solve what people would identify as cross-border payments and making that more efficient, we are basically leaning in towards the local infrastructure where regulators recently or in the recent years has invested heavily in creating instant experiences, instant payment systems here, and even gone in and enforced via legislation and regulation that banks should adhere to these things.”
“We give you the ability to set up local accounts in various jurisdictions via our direct relationship with the central banks. You can collect real-time, and what we would do would be enabling an overview of all of your accounts real-time in all of these jurisdictions, and via our operating model, we would give you the ability to access those funds and move them real-time.”
Our tech stack is designed for agility – using APIs to deliver real-time payments and full account visibility to our clients across jurisdictions.
Building Regulatory Trust
Banking Circle has cultivated relationships with more than 600+ regulated entities and multiple central banks, earning the trust needed to operate at scale in complex regulatory environments. This trust is not incidental – it’s the foundation of everything we do.
“We’ve established relationships with regulators and central banks worldwide, giving us a proven track record of trust. This enables us to simplify compliance, maintain regulatory standards, and offer instant, secure payments across multiple jurisdictions.”
Our compliance framework is built to be repeatable, scalable, and efficient, ensuring that as we expand, we remain aligned with evolving regulations.