The global economy has evolved dramatically—but the infrastructure that moves money across borders hasn’t kept up. In the latest episode of the Payments Association’s Insights Podcast, Payall CEO Gary Palmer joined host Tony Craddock, Founder of The Payments Association to unpack the outdated systems still underpinning cross-border payments—and what needs to change.
Correspondent banking, a system rooted in the 1970s, continues to operate on manual processes, outdated infrastructure, and trust-based workflows that introduce risk and slow down payments. Meanwhile, demand is rising, access is narrowing, and too many financial institutions—particularly smaller banks and EMIs—are left on the sidelines.
The conversation between Gary and Tony didn’t just diagnose the problem. It pointed to a better way forward.
Watch the full podcast episode:
Here are four key insights from the discussion:
1. Trust-Based Systems Can’t Deliver Trust at Scale
Correspondent banking is built on bilateral trust—one institution performing due diligence on another, with little transparency, limited oversight, and no shared infrastructure. The result? Slow, expensive, and risky payments, where issues are discovered only after-the-fact through audits and investigations.
Gary made it plain: “There’s no system. There’s no platform. What we have is a conglomeration of manual processes that depend on people doing the right thing.”
2. Counterparty Risk Begins Before a Payment Is Sent
Risk in cross-border payments doesn’t begin with the transaction—it begins with how institutions onboard and manage counterparties. Yet today, most institutions still rely on Excel forms and PDFs to collect and assess key risk data.
Gary shared that out of the hundreds of institutions and central banks he’s worked with, not even one has had a digital onboarding system for financial institutions.
“The industry has transformed everything from healthcare to transportation,” he noted. “But we’re still shocked to see a digital process to onboard a financial institution?”
3. New Models Are Emerging—And They Level the Playing Field
Over the last decade, 25% of correspondent banks have exited the business, leaving even large institutions without reliable partners.
But now, global networks like Visa and Mastercard are stepping into the space—offering regulated institutions a faster, more transparent way to access cross-border rails.
This opens the door for more banks and more EMIs to offer compliant international transfers without compromising on speed, safety, or scalability.
4. Global Regulation Will Never Be Harmonized—But That’s Okay
Calls to harmonize global regulations are well-intentioned but unrealistic. As Gary explained, every country—and even jurisdictions within countries—interpret compliance differently. The solution isn’t harmonization. It’s technology that adapts to regulatory diversity.
Institutions need systems that let them configure their own rules, manage risk their way, and adapt in real time. Technology must be the bridge between global complexity and local compliance.
It's Time to Rethink What’s Possible
A new paradigm is emerging—one that puts transparency, automation, and real-time compliance at the center of how money moves across borders.
Whether you’re an originating institution struggling to find a correspondent bank, a PSP serving unbanked communities, or a bank looking to modernize your offering, the message is simple: you don’t have to accept the status quo.
📢 Ready to simplify your cross-border payments business—and win doing it? Contact us and we’ll help you do it.
