Tag: FX

For over half a century now, the global financial system has relied on a SWIFT mechanism that, in 2026, feels archaic. It was certainly revolutionary at the time for the banking messaging system that it is. It helped create a safer and more orderly way to get money from one bank to another.

Today, it’s seen as legacy infrastructure that brings with it a lot of friction. A transfer can take days to settle (in the 80s, sending money from the UK to Hong Kong in three days was impressive!), while fees are now seen as high and quite unpredictable. And, perhaps most disappointingly for a correspondence system, tracking the location of the funds is difficult. 

While information travels instantly, money has lagged behind – partly because replacing a large global system, which takes fraud seriously, is understandably sticky. But a quiet revolution has been happening from the bottom up. API-first financial infrastructure has been booming over the past decade, and alternative finance is growing so big that it no longer feels like an alternative.

The problem with legacy systems

To understand the magnitude of this revolution, you first have to appreciate the inefficiencies of the current status quo. Traditional Swift is a chain of correspondent banks – money doesn’t actually go from point A to B, but it passes through a series of intermediaries, all of which collect their own fee.

This structure is therefore inherently opaque. A business might send $10,000, but the recipient might receive $9,850. If the business says it wants the recipient to receive $10,000, then the sender will pay high fees, and it often won’t be clear whether they’re wire fees, exchange spreads, and so on. 

How modern API-first solutions work

The solution to this is interoperability and direct connection. Modern fintechs aim to be borderless, and they’re building their own “financial infrastructure” to achieve it. They might use SWIFT when it works out best, or they might establish entities in multiple countries and connect directly to local banking systems. They might use treasury tricks, where they can deposit/withdraw money from multiple users simultaneously to align a transfer, and achieve it even with no money ever crossing the border. In the end, it’s about choices, flexibility, and being agile.

This API-first approach means instant settlement. Because the payout is a local bank transfer, it clears within seconds.  Plus, the fees are clearer and the tracking is more accurate (fewer intermediaries).

The advantage for global business

For treasury managers and CFOs, the ability to consolidate liquidity is a game-changer for obvious reasons. Before, expanding into new regions like Latin America or Southeast Asia meant opening multiple local bank accounts, which was a bureaucratic nightmare, whether you’re a large corporation or an independent store.

Modern platforms allow users to see their global finances in one view. Through a single API integration, a company can automate pay-ins and pay-outs in dozens of countries. This means it’s easier to track liquidity and cash flow, but it also means it’s easier to manage multiple currencies and have an FX strategy. You can build up reserves in a multi-currency account wallet and execute timely transactions when the exchange rate is favourable (or when it’s large enough to get a bulk FX discount).

Who is driving the change?

Transparent cross-border payments are made up of global generalists and specialized regional experts. Wise is perhaps the most recognizable name and it was an early mover in setting the standard for transparency and mid-market exchange rates, while Airwallex carved out a strong position by offering a comprehensive platform that combines payments with card issuing and expense management – ideal for larger enterprises. 

Latin America is always an interesting environment because it has historically been characterized by fragmented banking systems. Belvo has set the standard for Open Finance, as they’ve helped build the API rails so businesses can access banking data and initiate payments in markets like Mexico, Brazil and Colombia. On the issuing side, Pomelo provides the cloud-native infrastructure to help companies launch and scale, while Dock operates heavily in the background as a banking-as-a-service powerhouse.

Prometeo has positioned itself to focus specifically on borderless banking for treasury management. Here, the international payment solution provides a single API that consolidates these local networks to allow for automated liquidity movement between Latin America and the US.

Value movement

Instant international payments is still a new concept to larger banks. But for those looking to take advantage of maturing open banking regulations, payments is an area which is improving in quality while decreasing in cost. It has come at a time of the rise of crypto, which is in part how crypto has been kept at bay away from mainstream use. Going forward, it’s unlikely to see large corporations embrace interoperability because it’s a playing field leveller, and so bottom-up fintech movements will continue to shape consumer experience.