Last-mile delays remain a challenge for cross-border payments

By Divya Shah

Key takeaways:

• Last-mile processing accounts for 80% of the average cross-border payment journey.

• Swift recommends connecting international payment networks with domestic instant payment systems to reduce delays.

Why this matters: Faster domestic payment connections can reduce cross-border delays, improve payment transparency and help financial institutions deliver more predictable customer experiences.

Swift has published new research showing that half of the transactions across its global network reach recipient institutions within 40 seconds. However, delays in the final stage of processing continue to affect how quickly customers receive cross-border payments. 

The findings come as the financial industry works towards the G20 target of making international payments faster, more predictable and transparent. 

Swift’s latest Spotlight on Speed research examined payment processing times across 40 receiving markets, focusing on the period between a payment reaching the receiving institution and the funds being credited to the beneficiary’s account. This stage, known as the ‘last mile’, accounts for 80% of the average cross-border transaction’s total processing time. 

The research found differences in last-mile processing times across markets. In around one-third of the markets analysed, the median time taken to credit payments to beneficiary accounts was approximately one hour. Other markets showed a mix of fast payments and considerably slower transactions. 

Swift said that while interbank processing has become consistently faster, customers do not always benefit because of delays within receiving institutions and domestic payment systems. 

The findings also highlighted progress made through Swift’s retail payments framework, which has been used by banks since June to improve cross-border payment experiences along major international payment routes. 

Under the framework, some transactions have been completed within seconds. Examples included payments from Turkey to Spain in 15 seconds, Australia to India in 37 seconds and Brazil to the US in one minute. 

The research recommended that financial institutions and regulators prioritise ‘one-leg-out’ arrangements. These connect international payment networks with domestic instant payment systems, allowing the local part of a cross-border transaction to be processed more quickly. 

Swift said its global network already supports such arrangements in some markets, with end-to-end tracking extended across the domestic payment leg to improve transparency and visibility. 

Thierry Chilosi, Chief Business Officer at Swift, said the industry had made consistent progress in cross-border processing speeds but needed to address differences in last-mile processing to improve the customer experience. 

He added that connecting Swift’s infrastructure with domestic instant payment systems could improve payment speed, predictability and transparency, making wider adoption of one-leg-out arrangements a priority.