The cross-border retail payments market is complex, involving many different parties, use cases and underlying arrangements. The payer and payee in a cross-border retail payment are typically located in different jurisdictions and require intermediaries operating in multiple jurisdictions. In addition to these multiple actors, many different elements, arrangements and processes need to be in place to enable cross-border retail payments to be made and received.

End users differ across payment types in terms of their needs, requirements and capabilities. It is useful when analysing retail payment demand to distinguish between different combinations of several types of end users


Types of cross border retail payments


The general classification of payment types and associated use cases broadly applies to retail payments. However, in the context of cross-border retail payments, the following payment types are typically considered the most important in terms of volume, value or both:


•  Person-to-person (P2P) payments: the payer and the payee are both individuals.

The most important P2P use case is the transfer of money to family members or friends abroad, without an underlying economic transaction. Such transfers are often referred to as international remittances.

•  Person-to-business (P2B) payments: the payer is an individual and the payee a business.

Important P2B use cases include payments for purchases of retail goods and services from businesses abroad via the internet, payment of bills (eg school fees or utilities) directly to a provider abroad, and payments resulting from international tourism or business travel.

•  Business-to-business (B2B) payments: the payer and the payee are both businesses.

Due to the broad differences among businesses, B2B use cases vary widely and can involve large payments by multinational corporations for raw materials, semi-finished goods and wholesale products, as well as smaller and less frequent payments by small and medium-sized enterprises (SMEs) or non-government organisations (NGOs).


Other payment types, such as payments between governments and individuals or businesses, can arise in certain situations. However, these payment types seem to contribute less significantly to demand for cross-border retail payments than the payment types noted above.


The Committee on Payments and Market Infrastructures (CPMI)