Nearly eight in ten adults worldwide now have a financial account, but access to financial services does not necessarily translate into seamless participation in the global economy. For cross-border payments, the gap between holding money digitally and moving it efficiently across markets remains significant.
TerraPay’s Connected Economies: The Next Era of Global Financial Connectivity report argues that while the industry has made considerable progress on financial inclusion, financial participation remains a challenge. Fragmented infrastructure, limited interoperability, and high transaction costs continue to prevent banks, PSPs, fintechs, and digital wallets from connecting easily.
Access is growing, but affordability remains a challenge
Around 79% of adults worldwide hold a transaction account, rising to approximately 75% in low- and middle-income countries (LMICs). Yet 1.3 billion people still lack a formal financial account.
For those already connected, affordability remains a concern. The average remittance cost is 6.49%, more than twice the UN Sustainable Development Goal and G20 target of 3% by 2030. On a USD 200 transfer, this represents approximately USD 13 in fees. Costs also vary significantly between markets, averaging 15.65% in South Africa and 4.49% in Germany, the lowest among G20 countries cited in the report.
For banks and PSPs, these disparities highlight the need to improve cross-border payment routes and access to local payout infrastructure. Reducing friction at the receiving end is essential to making international transfers more affordable.
The domestic last mile drives payment delays
The report challenges the assumption that the international leg is the primary source of cross-border payment delays. According to its findings, the cross-border segment accounts for less than 20% of total payment journey time, while the remaining 80% occurs in the domestic last mile, where funds must reach a bank account, digital wallet, or cash-out location.
The operational impact is considerable. Swift estimates that investigating delayed payments costs the industry more than USD 1.6 billion annually.
Although more than 98% of payment instructions now use ISO 20022, standardisation alone cannot resolve these bottlenecks. The challenge is extending interoperability beyond traditional banking networks to the local payment systems and digital endpoints where customers receive and use funds.
For banks and PSPs, improving cross-border performance therefore requires not only efficient international processing but also stronger local partnerships and broader payout capabilities.
Digital wallets remain disconnected from cross-border payments
TerraPay’s report highlights a significant mismatch between consumer preferences and available payment options. Its survey found that 99.9% of respondents want to use a digital wallet for international transfers, yet 84% cannot, while wallets account for just 3.9% of international payments.
This gap matters as mobile money and digital wallets become increasingly established in domestic markets. African mobile money platforms processed more than USD 1 trillion in transactions in 2025, while 81% of gig workers reportedly prefer instant payments.
GSMA data further shows that bank-to-mobile-money transfers tripled between 2019 and 2023, while mobile-to-bank transfers increased fivefold.
These trends position wallets as important components of the payment ecosystem, with growing relevance for remittances, gig-economy payouts, and international commerce. Connecting them to cross-border networks could help banks and PSPs expand payout options, improve customer choice, and reach underserved markets.
Interoperability delivers measurable results
The report highlights several examples of connectivity initiatives delivering practical benefits.
Silent Roar Media reduced bank charges by 80% and cut transaction times from days to minutes. M-PESA’s partnership with TerraPay enabled more than 32 million customers to send and receive money with more than 200 million people across Bangladesh and Pakistan.
In Bolivia, Tigo Money’s integration with ACCL extended its reach to most local banks, connecting mobile money with traditional banking infrastructure. Meanwhile, a local-currency payment system linking Brazil with Argentina, Paraguay, and Uruguay enables transactions without an intermediary currency.
Although these initiatives address different markets, they demonstrate a common principle: payment efficiency depends on how effectively networks connect. For providers, interoperability partnerships can support market expansion, improve access to local payout networks, and reduce transaction friction.
What the last-mile challenge means for the payments industry
Fragmentation extends beyond individual transactions. The report identifies barriers at payment, financial-system, and macro-financial levels, with Swift projecting potential global GDP losses ranging from 1.2% by 2030 in the best-case scenario to almost 6%, or USD 6.5 trillion, in the worst-case scenario.
For the industry, interoperability is therefore an economic priority as well as a technical one. Common standards such as ISO 20022 provide a foundation, but their benefits depend on effective connectivity across banks, PSPs, fintechs, wallets, and local payment systems.
More efficient payment networks could help merchants improve international payouts, while banks and PSPs could expand their reach and reduce operational friction. Achieving this will require collaboration rather than isolated infrastructure investments.
To monitor progress, TerraPay plans to launch a global research programme focused on financial connectivity and participation, tracking developments and identifying remaining barriers.
Download the TerraPay report to explore the findings and their implications for cross-border payments: Connected Economies: The Next Era of Global Financial Connectivity.
About Claudia Pincovski
Claudia is a News Lead Editor at The Paypers. Holding a bachelor’s degree in journalism, she is very passionate about exploring the latest news on financial inclusion, financial literacy, digital banking, and Open Finance. Claudia is a diligent researcher, a meticulous editor, and an active advocate for diversity and inclusion.
About TerraPay
TerraPay partners with banks, money-transfer operators, wallets, and licenced global businesses to enable global money movement. TerraPay is headquartered in London, with offices in Bangalore, Dubai, Miami, Bogota, Dakar, Joburg, Nairobi, Milan, DaresSalaam, Kampala, Hague, and Singapore. Its investors include the IFC (the World Bank), Prime Ventures, Partech Africa, and Visa.
