Before the founding of Swift in 1973, cross-border payments relied on Telex – a teleprinter-based system that transmitted unstructured free-text messages between banks. A breakthrough when introduced in the early 1930s, by the late 1960s Telex’s deficiencies in facilitating international payments were becoming increasingly apparent, with concerns focusing on cost, speed, and its capacity to introduce human error.¹

This led 239 banks across 15 countries to establish Swift as a cooperative utility, introducing common standards and a secure and reliable way to exchange payment instructions.

Since going live in 1977, the network has grown to connect more than 11,500 institutions across more than 220 countries and territories,² forming the backbone of global payments. That dominance, however, does not remove the need for continued innovation. Just as the limitations of Telex drove the creation of Swift, rising expectations for faster, lower-cost and more transparent cross-border payments – reinforced by the G20’s global push for improvement – are creating a new inflection point.³

In response, emerging technologies and alternative models are gaining traction, offering different ways to move value across borders.

The challenge is not to prevent fragmentation – which is inevitable as new rails, jurisdictional infrastructures and digital value forms emerge – but to ensure interoperability across them. Without this, fragmentation risks creating a more disconnected and inefficient ecosystem. With it, however, a more diverse set of payment models can coexist, supporting new trade corridors and use cases while maintaining global connectivity – see also the flow article ‘Nobody wins from fragmentation’.

This article explores the role Swift plays, how the cooperative is evolving to meet rising expectations, and how emerging models are shaping – and complementing – the existing system for correspondent banking, with insights from Deutsche Bank provided by Jonas Stepczynski, Head of Strategy and Global COO, Institutional Cash Management, Deutsche Bank.

Improving the cost, speed, access and transparency of cross-border payments has become a global priority – formalised in the G20 Roadmap in 2020 but actively pursued by the industry for years. Much of this progress has focused on strengthening the existing correspondent banking model, rather than replacing it.

A defining step came in 2017 with the launch of the Swift Global Payments Innovation (GPI) initiative, which introduced end-to-end tracking and fee transparency, fundamentally changing how cross-border payments are transacted. What had long been a ‘black box’ became not just fast, but traceable, predictable and measurable – bringing international payments closer to the standards of domestic systems. Today, 75% of payments sent via Swift arrive – tracked end-to-end – at the beneficiary bank within 10 minutes, and many in seconds.⁴

Since then, the same principles have been extended further. Capabilities such as API-based payment pre-validation, which followed in 2021, allow beneficiary details to be checked before a transaction is sent, reducing the scope for errors and repair costs, while also strengthening fraud controls (see the flow article ‘Fraud and friction – how payment pre-validation can help’). As payments become faster and increasingly real-time, the window to detect and stop fraud narrows – making such controls an embedded and necessary part of the payment flow across both bank and client environments.

“As an industry, we’ve made great progress on speed and traceability of cross-border payments over recent years, although there’s more to be done,” says Nasir Ahmed, Head of Swift Payments scheme. “But the solutions that are behind many of the recent improvements are often not seen or felt by the end user. Putting existing capabilities into customer channels is a quick win for financial institutions, which can help enhance transparency, certainty and speed while driving the industry towards the G20’s targets.”

In parallel, connectivity is shifting towards real-time, API-based models. New services such as Instant Cash Reporting (ICR) enable access to account and balance data through a single standardised connection, reflecting growing demand from corporates for multi-bank visibility and more consistent integration. Deutsche Bank and Iberdrola were among the first to implement ICR in 2025, using API-based connectivity to enable real-time access to account data and support more automated treasury processes.

“From the early development of GPI through to more recent initiatives such as payment pre-validation and ICR, our partnership with Swift has been focused on shaping practical solutions that improve the end-to-end experience for both financial institutions and corporates,” adds Deutsche Bank’s Jonas Stepczynski.

Even as Swift’s capabilities continue to improve the experience within its network, much of the remaining friction sits outside it. Up to 80% of a transaction’s journey can be spent in the ‘last mile’ – the phase when funds move from the beneficiary bank to the end account – and where domestic regulations, local clearing systems and market practices still impose delays and uncertainty. For retail and remittances in particular, opaque costs also remain a core issue – costing on average US$12 to remit US$200 across borders.⁵

To address this, in September 2025 Swift and a global coalition of banks launched a new framework for cross-border retail payments, extending core principles such as transparency and predictability through to the final leg of the transaction. The framework aims to ensure the best possible user experience by enabling full-value delivery, upfront fee certainty, end-to-end traceability, and instant settlement where possible.⁶

While Swift’s network is predominantly used for wholesale transactions, Swift says its capabilities can enable the best possible user experience for individuals sending money to family abroad or small businesses buying goods from overseas. “Many banks have committed to introducing the retail payments framework this summer, with more planning to go live by the end of the year,” says Ahmed. “Five of the biggest remittance markets in the world – Australia, Bangladesh, China, Germany and India – will be among the first to see the impact.”

This is not a challenge Swift is addressing alone. As the March 2026 report Cross-border payment technologies: innovations and challenges from the Bank for International Settlements (BIS) emphasises, “enhancing cross-border payments must take into account the evolution of domestic systems, as the first and last miles of cross-border payments are typically processed through domestic infrastructures.“⁷

Schemes are, therefore, emerging globally that process one leg of a cross-border transaction – either outbound or inbound – through domestic instant payment systems. On the receiving side, this approach directly targets the last mile by ensuring that once funds reach the destination market, they can be credited instantly via local rails.

Several of these schemes are already in place. In Europe, the European Payments Council’s One-Leg Out Instant Credit Transfer scheme uses existing infrastructure, standards and procedures to enable instant processing of the euro leg of cross-border transactions.⁸ Elsewhere, domestic instant payment systems such as Singapore’s Fast And Secure Transfers and Australia’s New Payments Platform are also being extended to support cross-border payments.⁹

By design, these models address only one leg of the transaction, with the remaining parts still reliant on established trusted global infrastructure such as Swift. However, taken a step further, were similar frameworks to be implemented on both sides of a transaction they could, in theory, enable cross-border flows to be coordinated directly between domestic systems – providing a foundation for more formal bilateral or even multilateral arrangements. (For more on one-leg-out arrangements see the September 2025 flow briefing, ‘Unlocking instant cross-border payments’.)

In Europe, for example, bilateral linkages are already being explored, including technical assessments for a direct connection between the region’s TARGET Instant Payment Settlement and India’s UPI – one of the world’s largest instant payment systems.¹⁰ At the same time, broader multilateral interlinking is being examined through initiatives such as the BIS-initiated Project Nexus, which aims to connect domestic instant payment systems through a common hub.¹¹

The result could be a ‘network of networks’: a globally interconnected layer of domestic payment infrastructures, linked through shared standards and reciprocal arrangements. “Domestic instant payment systems will play an increasingly important role in improving the speed and predictability of cross-border flows,” explains Stepczynski. “Rather than an ‘either-or’ dynamic, the one-leg-out schemes now emerging and Swift’s new cross-border framework for consumer payments are more likely to operate in a complementary way, combining local execution with global coordination.”

Distributed ledger technology (DLT) introduces a different model for moving value across borders – one that challenges the sequential, multi-party processes that underpin today’s correspondent banking. Rather than passing messages between institutions and reconciling positions at each step, participants operate from a shared, synchronised view of transactions – enabling value and information to move together in real time.¹²

At the centre of the new model are three emerging forms of digital money – stablecoins, tokenised deposits, and wholesale central bank digital currencies (CBDCs) – each addressing different use cases across the payments and settlement landscape (see our May 2026 flow whitepaper on digital money).

Stablecoins are blockchain-based tokens issued by banks, corporates or fintechs, typically backed one-for-one by fiat currency. While an estimated 95–99% of volumes still relate to crypto market activity, real-economy use cases are emerging. They are increasingly used for cross-border remittances and B2C payouts, particularly where speed, cost and access to US dollar liquidity are key.

Stablecoins will have a role to play in the future of cross-border payments. The question is to what extent, says Stepczynski. “Rather than a single future platform emerging, the likelihood is that there will be solutions for different use cases playing out on different rails. These will include stablecoins, but also tokenised deposits which are more flexible in application.”

Indeed, progress is more advanced around tokenised deposits, which represent commercial bank money issued on a blockchain, enabling funds to move between accounts with near-instant settlement, extended operating hours and embedded programmability (see the flow article, ‘How tokenised assets transform liquidity management’). Today, many implementations are bank-centric, supporting internal liquidity management and treasury use cases; however, the model is evolving toward cross-border applications.

Platforms such as Partior enable the real-time movement of tokenised commercial bank money between participating institutions, combining atomic settlement with pre-validation to reduce friction in cross-border payments. In September 2025, for example, Deutsche Bank announced that it had successfully conducted its first euro-denominated cross-border payment via Partior’s blockchain platform.

Wholesale CBDCs extend this concept to central bank money. While reserves are already held digitally in real-time gross settlement systems, tokenisation allows these settlement assets to be integrated directly into DLT environments. This enables atomic settlement across payments and securities, reducing counterparty risk and reliance on correspondent banking chains. Initiatives such as Project Agorá – also BIS-led, with a consortium of seven central banks and 40 private sector institutions including Deutsche Bank and Swift – are exploring how tokenised central bank money can interoperate with tokenised deposits on a shared ledger, effectively modernising interbank settlement.¹³

“Swift’s ledger addresses the core challenge of interoperability between banks’ tokenised value forms”Jonathan Ehrenfeld, Head of Strategy for Swift’s ledger

A central challenge in these developments is interoperability, as many initiatives still rely on specialised on- and off-ramps to connect with the traditional financial system. Improving interoperability would reduce the cost and complexity of linking systems, limit the need for multiple connections, and lower barriers between traditional and emerging infrastructures.¹⁴

Swift, for its part, is currently implementing a DLT-based shared ledger capability to enable institutions to coordinate tokenised value alongside existing payment flows, while maintaining alignment with global standards such as ISO 20022.¹⁵

“Swift’s ledger addresses the core challenge of interoperability between banks’ tokenised value forms, as well as coordination across institutions around the world, while also preparing the global ecosystem for the seamless entry of future forms of regulated digital money,” says Jonathan Ehrenfeld, Head of Strategy for Swift’s ledger. “Financial institutions can use their existing secure Swift connectivity to access and transact with regulated digital assets while maintaining the trust, resilience, and compliance that are synonymous with Swift.”

In March 2026, Swift completed the design phase of the ledger and built the first iteration to enable interoperability between banks’ tokenised deposits, facilitating 24/7 cross-border payments. The minimum viable product is planned to go live this summer with real-world transactions, allowing participating banks to execute real-time payments, gain a synchronised view of obligations, and test 24/7 payment flows.¹⁶

With multiple models being explored in parallel, new ways to move money do not simply challenge infrastructure – they also begin to reshape the role of banks within that infrastructure. “In a landscape with fragmented infrastructure, the role of correspondent banks will be significantly rewired; winners in the future will have to operate at global scale, seamlessly orchestrate across multiple payment ecosystems, and mobilise liquidity across traditional and digital currencies,” says Stepczynski.

While the roles and approaches may change, for banks this reflects a continuation of an established principle. “If you look back to the founding of Swift, it was about making cross-border payments better for everybody. As a bank our focus today remains the same: deploying the right infrastructure or technologies, targeted at the right use cases, to best serve our clients,” Stepczynski says. “In this respect our strategy has not changed. We will continue to act as the connective tissue for our clients, orchestrating multiple payments ecosystems.”

“In a landscape with fragmented infrastructure, the role of correspondent banks will be significantly rewired”Jonas Stepczynski, Head of Strategy and Global COO, Institutional Cash Management, Deutsche Bank

For Swift, a similar philosophy applies. “There have always been multiple ways to send money across borders, and the ecosystem will continue to expand. The choice available to end users, around what value form they pay with or what network they use, is only going to increase,” explains Ehrenfeld. “We’ve always been agnostic to technology and currencies – for us, the goal is to enable transactions to flow seamlessly and securely right across the world. Which value form those transactions are in is down to the institutions.”

He continues: “With both the framework for retail transactions and with the blockchain ledger, we’re facilitating the best possible experience using existing technology, while also ensuring the benefits of digital finance can scale, and their benefits can be felt by everyone.”

In this context, the direction of travel is not towards replacement, but towards coexistence. Interoperability will be critical in determining how these models scale, shaping whether the ecosystem becomes more fragmented or more efficient.

Sources

¹ See Origins and Development of SWIFT, 1973–2009 at eprints.lse.ac.uk
² See Swift in numbers at swift.com
³ See G20 Targets for Enhancing Cross-border Payments at fsb.org
⁴ See Spotlight on Speed 2025 at swift.com
⁵ See Cross-border payment technologies: innovations and challenges at bis.org
⁶ See Transforming consumer payments: Banks roll out new framework for retail transactions at swift.com
⁷ See Cross-border payment technologies: innovations and challenges at bis.org
⁸ See What we do One-Leg Out Instant Credit Transfer at europeanpaymentscouncil.eu
⁹ See Unlocking instant cross-border payments at flow.db.com
¹⁰ See Eurosystem moves forward on work to connect TIPS with India’s Unified Payments Interface and with Nexus Global Payments at ecb.europa.eu
¹¹ See Project Nexus: enabling instant cross-border payments at bis.org
¹² See What is distributed ledger technology? at bis.org
¹³ See Project Agorá: exploring tokenisation of wholesale cross-border payments at bis.org
¹⁴ See Interoperability between payment at bis.org
¹⁵ See Swift to add blockchain-based ledger to its infrastructure stack in groundbreaking move to accelerate and scale benefits of digital finance across more than 200 countries and territories worldwide at swift.com
¹⁶ See Swift’s blockchain-based shared ledger progresses to MVP implementation at swift.com