Guides
Cross-border payment solutions for merchants: acquiring, FX, local methods and payouts
A cross-border payment is one where the payer's bank or card issuer and the merchant's acquirer or bank sit in different countries. For merchants this usually means higher card interchange, extra scheme fees, lower approval rates and currency conversion. Cross-border payment solutions reduce those costs by acquiring locally, offering each country's preferred payment methods, pricing in local currency and paying out over local rails.
At a glance
| Interchange, EEA consumer cards | Capped at 0.2% debit and 0.3% credit, also when the acquirer is in another EEA country |
|---|---|
| Interchange, non-EEA consumer cards online at EEA merchants | 1.15% debit and 1.50% credit under Visa and Mastercard commitments to the European Commission, extended to November 2029; UK cards are charged at the same levels |
| Published blended card prices, Netherlands | 1.5% + €0.25 EEA cards, 2.5% + €0.25 UK cards, 3.15% + €0.25 international cards, plus 2% for currency conversion (Stripe, October 2026) |
| Instant euro credit transfers | Euro-area PSPs must send them, with verification of payee, since 9 October 2025; non-euro EU countries by 9 July 2027 |
| G20 targets for end-2027 | Retail cross-border payments at an average cost of no more than 1%, with 75% credited within one hour |
| Average cost of a $200 remittance | 6.36% globally in Q3 2025 (World Bank) |
| CESOP reporting | Since 1 January 2024, EU PSPs report payees receiving more than 25 cross-border payments per quarter |
What are cross-border payments?
A payment is cross-border when the two financial institutions involved are in different countries. For card payments the decisive question is whether the card issuer's country matches the acquirer's country, not where the shopper or the goods are. For transfers it is whether the sending and receiving banks are in the same country or payment area.
Currency is a separate dimension. A Belgian card paying a Dutch shop in euros is cross-border but needs no conversion, while a Swiss card paying in euros is cross-border, outside the EEA and usually converted by the issuer.
Local acquiring vs cross-border acquiring: what is the difference?
With cross-border acquiring, a single acquirer in your home country processes cards from every market. It is simple to set up, but issuers see a foreign merchant, card schemes add cross-border fees, and cards from outside the EEA carry higher interchange. Issuers' fraud models also treat foreign merchants with more suspicion, so approval rates are typically lower than for domestic transactions.
With local acquiring, a payment is processed by an acquirer in the shopper's country, so it is domestic for the issuer. That usually raises approvals and lowers interchange, but it may require a local entity or a provider that acquires locally on your behalf.
| Criterion | EU acquirer (cross-border) | UK acquirer (local) |
|---|---|---|
| Interchange, consumer debit | 1.15% | 0.2% (UK cap) |
| Interchange, consumer credit | 1.50% | 0.3% (UK cap) |
| Scheme fees | Domestic plus cross-border assessments | Domestic only |
| Approval rates | Typically lower | Typically higher |
| Settlement currency | Often converted to EUR | GBP |
| Requirements | None beyond your EU contract | UK-eligible entity or a provider that acquires locally |
How do FX and dynamic currency conversion work in cross-border payments?
If you price in euros and the shopper pays with a card in another currency, the issuer converts at its own rate and the shopper sees a foreign transaction fee. If you price in the shopper's currency, your provider converts on settlement and typically adds a 1% to 2% margin; Stripe publishes 2% in 2026.
Dynamic currency conversion (DCC) lets the shopper choose at checkout between paying in your currency or theirs at a rate you or your provider set. Under Regulation (EU) 2021/1230, the party offering DCC must show the total conversion charge as a percentage mark-up over the latest ECB euro reference rate before the shopper confirms.
- Multi-currency pricing: clearest for shoppers; you carry or hedge the FX risk
- Single-currency pricing: simplest for you; the issuer's conversion cost lands on the shopper
- DCC: extra margin for the merchant, but regulated disclosure and often lower shopper trust
- Local settlement accounts: hold GBP, CHF or PLN and convert in bulk at better rates
Which local payment methods do you need in each region?
Card share drops sharply outside the US and UK, so local methods decide conversion. In the euro area cards carry about half of online payments, and the rest goes to methods such as iDEAL, Bancontact, BLIK, Bizum and SEPA Direct Debit.
Bank-based methods also remove most of the cross-border penalty: they settle as credit transfers, carry no interchange and are final once confirmed. See the guide to alternative payment methods for country-by-country shares.
- EU: iDEAL (NL), Bancontact (BE), BLIK and Przelewy24 (PL), Bizum (ES), PayPal and invoice (DE), SEPA Direct Debit
- UK: cards, PayPal, Apple Pay and Pay by Bank over Faster Payments
- Switzerland and the Nordics: TWINT, Vipps MobilePay, Swish
- Latin America: Pix and boleto in Brazil, OXXO and SPEI in Mexico, cards in instalments
- United States: cards, Apple Pay, PayPal and ACH bank debits
Selling from the EU into another market: what changes?
The table summarises what an EU-based merchant with an EU acquirer should expect when adding a new market. Tax thresholds are given for orientation; confirm them with a tax adviser before launch.
| Market | Card interchange with an EU acquirer | Local methods to add | Tax and compliance |
|---|---|---|---|
| Another EEA country | 0.2% debit, 0.3% credit (IFR) | iDEAL, BLIK, Bizum, Bancontact and others | VAT via OSS once EU distance sales exceed €10,000 a year |
| United Kingdom | 1.15% debit, 1.50% credit | Pay by Bank, PayPal | UK VAT registration from the first sale; VAT collected at sale on parcels up to £135 |
| Switzerland | 1.15% debit, 1.50% credit | TWINT, PostFinance | Swiss VAT registration from CHF 100,000 a year of small consignments |
| United States | 1.15% debit, 1.50% credit | ACH, Apple Pay, PayPal | State sales tax once economic nexus is reached, typically $100,000 a year |
| Brazil | Not capped; IOF tax for the shopper on foreign purchases | Pix, boleto, local cards in instalments | Local acquiring needs a CNPJ, or a cross-border PSP that collects locally |
How do cross-border payouts and remittances work?
A payout is money a business sends out: refunds, marketplace seller settlements, affiliate commissions or supplier invoices. Inside the euro area, SEPA credit transfers arrive by the next business day and SEPA Instant within seconds, at no higher price than a standard transfer. Outside SEPA, payouts run over SWIFT through correspondent banks, or over local rails through payout providers.
SWIFT transfers carry sender, intermediary and FX charges that are hard to predict. The World Bank's Remittance Prices Worldwide put the global average cost of sending $200 at 6.36% in Q3 2025, with banks the most expensive channel, far above the G20 targets for 2027.
| Rail | Speed | Coverage | Cost driver |
|---|---|---|---|
| SEPA Credit Transfer | Next business day | SEPA countries, EUR | Low fixed fee |
| SEPA Instant | Within 10 seconds, 24/7 | Euro-area PSPs; non-euro EU from 2027 | Capped at standard transfer price |
| Local rails via a payout provider | Same day to 2 days | Faster Payments, Pix, SPEI and others | Fixed fee plus FX margin |
| SWIFT | 1 to 5 business days | Global | Bank fees, intermediary deductions, FX |
Which compliance rules apply to cross-border payments?
Cross-border flows draw more scrutiny from your providers and tax authorities. Your PSP screens payers and payees against sanctions lists and runs anti-money-laundering checks, and since 1 January 2024 EU PSPs report payees that receive more than 25 cross-border payments a quarter to the CESOP database used by tax authorities.
Strong customer authentication applies to cards issued in the EEA; for cards issued elsewhere it is applied on a best-effort basis, so 3-D Secure results vary by issuer country.
- Sanctions screening and KYC on payers, sellers and payout recipients
- VAT: OSS and IOSS in the EU, local registration in the UK and Switzerland
- CESOP reporting by your PSP on cross-border payment volumes
- Data transfer rules under GDPR when payment data leaves the EEA
- Licensing: holding or forwarding other parties' funds requires a payment licence or a licensed partner
How do you build a cross-border payment stack?
Most merchants end up with several providers: a home acquirer, a local acquirer or cross-border PSP for each major market, local method operators and a payout provider. The difficulty is not signing the contracts but running them as one system with consistent checkout, routing, refunds and reconciliation.
To run this through OrsunPay, you connect your own acquirer, PSP and payout accounts, and smart routing sends each payment to the local or cross-border connection with the best expected approval and cost by card country, currency and method. OrsunPay is a technical service on top of those accounts; it does not hold funds or act as an acquirer.
How to expand your payments into a new country
- Measure demand and the card mix Check traffic, abandoned checkouts and the share of foreign cards from that country in your current transactions.
- Add the leading local method Enable the one or two methods that most shoppers in the country use, through your existing PSP if it covers them.
- Decide on local or cross-border acquiring Model interchange, scheme fees and approval rates for both set-ups on your expected volume; local acquiring usually pays off for a top-three market.
- Price in local currency Show prices in the shopper's currency, open a settlement account in that currency if volume justifies it, and compare FX margins.
- Settle tax, payouts and reporting Register for VAT or sales tax where required, set up payouts over local rails and reconcile every provider in one report.
Frequently asked questions
What is a cross-border transaction?
It is a payment in which the payer's bank or card issuer and the payee's bank or acquirer are in different countries. Cross-border card transactions typically cost more and are declined more often than domestic ones, even when no currency conversion is involved.
Why are cross-border card payments declined more often?
Issuers' fraud models treat purchases from foreign merchants as higher risk, and some cards, especially domestic debit cards, are not enabled for international use. Processing the payment through a local acquirer makes it domestic for the issuer and typically raises approval rates.
Are cross-border card payments within the EU more expensive?
Interchange is capped at 0.2% for consumer debit and 0.3% for consumer credit across the EEA, whether or not the acquirer is in the shopper's country. Scheme fees and some provider tariffs are still higher for cross-border transactions, so local acquiring can be cheaper at volume.
What is a payout?
A payout is a transfer from a business to someone else, such as a refund to a customer, a settlement to a marketplace seller or a payment to a supplier or affiliate. Cross-border payouts are cheapest over local rails such as SEPA or Faster Payments rather than SWIFT.
What is remittance advice?
Remittance advice is a note a payer sends with or after a payment, telling the recipient which invoices it covers and in what amount. It helps the recipient match incoming transfers to invoices, which matters most for cross-border B2B payments that arrive with reduced amounts after bank deductions.
Is dynamic currency conversion good for merchants?
DCC earns the merchant or its provider a conversion margin, but the shopper usually pays more than with the card issuer's rate. EU rules require the mark-up over the ECB reference rate to be shown before the shopper confirms, so many merchants price in local currency instead.
Explore OrsunPay
Talk to our teamSources
- Regulation (EU) 2021/1230 on cross-border payments in the Union (EUR-Lex)
- European Central Bank: Instant Payments Regulation deadlines
- European Commission: Visa and Mastercard inter-regional interchange commitments, case AT.40049
- World Bank: Remittance Prices Worldwide
- Financial Stability Board: Targets for addressing the four challenges of cross-border payments