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Unmasking the Hidden Costs of Cross-Border Payments in FMCG (2025)

cross-border payment costs don’t show up on one neat line in your P&L.

They leak through spreads, deductions, repairs, investigations, and missed windows that stall operations. If your team still treats “fees” as the whole story, margin is slipping away—quietly.

cross-border payment costs

The global scoreboard you can’t ignore

There’s a public scorecard on cross-border performance: cost, speed, transparency, access.
That’s the G20 roadmap, coordinated by BIS/CPMI. If your internal metrics don’t map to those pillars, you’ll keep debating anecdotes while the world sets targets for you. Bank for International Settlements+1

As a rough friction signal, the World Bank’s tracker still shows a 6.49% global average for retail remittances. You’re not retail—but that number is a reminder: many corridors remain sticky and expensive. Your task is to design away from those frictions. Remittance Prices Worldwide

The 2025 data shift behind speed (and cost)

The network is changing languages. ISO 20022 becomes mandatory for cross-border FI-to-FI payment instructions when the CBPR+ coexistence period ends 22 November 2025. Structured names, addresses, and purpose codes aren’t paperwork—they’re how screenings pass, intermediaries recognize beneficiaries, and money lands on time. Swift+1

When messages get richer, two things happen to cross-border payment costs: repairs drop; investigations fall. Both are real money. Bank for International Settlements

The truth about cross-border payment costs in 2025

“Fees” are only the loud part.
The quiet part lives in:

You can’t fix what you don’t measure. The scoreboard above tells you where to look. Bank for International Settlements

Where the money leaks—one quiet drip at a time

Spread vs. outcome. A sharp screenshot at 11:59 doesn’t equal best execution. For size, you want time-stamped dealer quotes compared to a transparent mid, and you want slippage measured weekly—by corridor. The market is deep; discipline earns basis points. (Context: global payments complexity keeps rising even as interfaces look simpler.) McKinsey & Company

Intermediary deductions. Each bank in the chain can take a lifting fee. If you can’t see the chain, you can’t predict the net credit. SWIFT gpi was built to improve fee and time transparency end-to-end so corporates can see what was deducted where. Swift+1

Repairs from fuzzy data. Missing city fields, truncated names, cryptic references—each “tiny” error triggers a repair, a re-submission, and sometimes a new fee. ISO 20022 reduces those miscues because data are structured the way screening tools and banks actually read them. Swift

Returns and reprocessing. Every returned payment is two problems: the fee you see and the cut-off you miss. BIS analysis of gpi data shows speed varies by route and practice—exactly why structured data and route discipline matter. Bank for International Settlements

Why Fridays and cut-offs make costs feel random

Speed isn’t a feeling; it’s a schedule.
If you release by habit rather than by rail capacity and cut-offs, you’ll “buy” an extra weekend of uncertainty. That uncertainty turns into:

The KPI work led by the Financial Stability Board exists because timing and transparency still vary widely. Your job is to make the rail’s schedule your schedule. Financial Stability Board+1

“Fees” you don’t see on invoices

Banks publish tariffs. Intermediaries take their slice. But the sneakiest items hide under “operations.”

Investigation fees. Every time you trace a payment, you’re paying someone to look across a chain you could have seen with UETR and gpi. Corporates adopted gpi precisely to reduce exception handling and investigations. SwiftSEPA for Corporates

Working-capital drag. Prefunding nostro accounts to “be safe” ties up cash. When you fix your release rhythm and route selection, you need less cushion—and you feel it in free cash flow. (The payments value chain is fragmenting; without orchestration, buffers swell.) McKinsey & Company

Sanctions screening: false positives, real delays

Compliance is non-negotiable. But inconsistent data and out-of-date masters generate false positives that trigger manual review, missed cut-offs, and another day of FX risk. Industry surveys show the volume and frequency of sanctions list changes keep climbing, pushing more pressure onto screening teams—one reason structured data and early screening matter. The Fintech Times

The fix is boring and powerful: enforce ISO 20022 fields at draft, pre-validate beneficiaries, and route exceptions with evidence rather than email. Do it earlier, and you won’t pay for it later. Swift

When correspondent banks retreat, your costs rise

A thinner correspondent network means fewer direct routes, more hops, and, often, higher all-in cost. BIS documented a ~20% decline in correspondent banking relationships between 2011 and 2018, with the retreat hitting weaker-governance markets hardest—exactly the places many FMCG supply chains rely on. Less access typically means more friction and cost. Bank for International Settlements

Research on de-risking also links lost correspondent access to lower exports and firm-level pain. That’s not abstract; it’s the cost of lost lanes. CEPREBRD

PvP and settlement plumbing: price means little if you settle badly

You can capture a great FX rate and still take a hit at settlement. Payment-versus-payment (PvP) removes principal risk by settling both currency legs at once. CLSSettlement handles 18 currencies and settles ~USD 6–7T daily—the market standard for de-risking eligible pairs. Using PvP where possible curbs fails, reprocessing, and the hidden costs of “almost done.” CLS Group+2CLS Group+2

Where PvP isn’t available, document mitigants (sequencing, netting, prefunding) and price those into your “all-in.” That’s honest accounting for cross-border payment costs. CLS Group

The reconciliation bill you pay every month

Your team doesn’t log those hours as “fees,” but they are.
If references don’t survive the chain intact, auto-match fails and humans go hunting. The whole point of ISO 20022 narratives and UETR traceability is to make reconciliation a check, not an investigation. Transparency on deducts and timestamps was designed into gpi for this reason. Swift

Fixing reconciliation isn’t vanity; it shortens dispute cycles with distributors and accelerates reorders. That’s revenue, not admin.

Your 90-day plan to measure, fix, and prove

Days 1–30: Tell the truth.
Pull 90 days of cross-border outflows across your top five corridors. For each, compute:

Add one public barometer to your slide deck—the G20 pillars—so your narrative matches the world’s. Bank for International Settlements

Days 31–60: Fix the pipe.
Map ERP fields to ISO 20022 and enforce at draft. Switch on beneficiary pre-validation. Require human-readable narratives (PO • invoice • lane). Turn on UETR tracking and gpi visibility for fee/time transparency. Prefer PvP settlement for eligible pairs; document mitigants where not. Align releases to rails and cut-offs. Swift+1

Days 61–90: Prove the delta.
Re-run the scoreboard. Convert time saved into dollars—day-slips avoided, repair charges removed, spreads compressed, cash buffers reduced. Keep before/after snapshots; they’ll pay for your next corridor upgrade. Financial Stability Board

What “good” looks like on your dashboard

You’ll know you’ve tamed cross-border payment costs when:

That’s not a dream; it’s what happens when the scoreboard, the message format, and the rails actually line up. SwiftBank for International Settlements

Make it real with FMCG Pay

You can bolt fixes onto old habits—or you can run one motion that treats cross-border payment costs as a design problem.

FMCG Pay ties ISO-clean drafts, automated screening, UETR/gpi transparency, corridor-aware routing, PvP-first settlement where eligible, and a live control tower your finance, AP, treasury, logistics, and sales teams all use.

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