Avoid the pitfalls: mastering cross-border payments to maximise the impact of international aid

For international development organisations, managing cross-border payments is a crucial but complex task.

Whether funding projects, paying local staff or supporting on-the-ground operations, the way funds are transferred can greatly impact both the efficiency and cost-effectiveness of these initiatives. In particular, the journey of international payments through the correspondent banking network poses unique challenges. This article explores how that system works, the risks involved, and how to make informed decisions when choosing payment solutions.

Selecting an ethical and reliable payment provider

When choosing a payment provider, it’s essential to consider both cost and security. Unregulated or less transparent providers may source liquidity from questionable entities, increasing the risk of funds being delayed, mismanaged or even lost.

To ensure you’re partnering with a trustworthy provider, consider the following:

• Local market knowledge: Providers with in-depth knowledge of the regions in which you operate can help you navigate local regulations and ensure compliance.
• Transparent fees: Make sure you understand all costs upfront and that your provider stands as principle to rate they have provided. There should be no hidden fees or costs imposed on the initial rate provided.
• Regulatory compliance: Verify that your provider complies with all relevant regulations and operates within a framework that priorities security and transparency. It is essential that this is also conducted at a local level.
• Payment security: Ask about the security protocols in place to protect your funds and ensure that payments are processed safely and on time.

By taking the time to thoroughly vet providers and their processes, you can reduce the risk of delays, fraud and unexpected costs, ensuring that vital funds reach their intended recipients securely and efficiently.

Best practices for managing cross-border payments

As part of the broader conversation around financial security and accountability, international development organisations should adopt the following best practices to streamline their payment processes:

• Transparency: Insist on clear documentation for every transaction, including fees, exchange rates and delivery times.
• Due diligence: Investigate the regulatory status of your payment provider and their banking partners to avoid working with unregulated entities.
• Flexibility: Explore different payment methods, including sending funds in local currency, to find the most secure and cost-effective solutions.

Interested in learning more?

Join us for a free, in-person event focused on cross-border payments for international development organisations. The event will be held on Thursday, 5th December at our office. Click here to request further details.

About StoneX

StoneX Payments, a division of StoneX Group, specialises in delivering tailored cross-border payment solutions for charitable organisations, governments, NGOs and UN agencies. Leveraging a global network of over 350 local banking relationships, we facilitate payments to more than 180 countries in over 140 currencies, ensuring secure, efficient and compliant transfers. As part of one of the fastest-growing Fortune 100 companies, StoneX Group provides institutional-grade financial services, offering execution, risk management and liquidity solutions to over 54,000 clients globally.