Imagine what air travel would look like if every country set its own rules – with no shared standards, no mutual recognition and no global coordination.

Aircraft approved in one country might be grounded in another. Pilots would need new certifications before entering each airspace. Air traffic control systems might not speak to one another, forcing constant manual intervention. Flying would still be possible – but slower, riskier, more expensive and far less accessible.

That world, while hypothetical for aviation, is very real for cross-border payments.

Fragmented global cross-border payments system

When money moves across borders, it does not travel through a single global system. Instead, it moves through a patchwork of national rules governing compliance, data handling and risk management.

A payment from the United States to Southeast Asia may pass through several intermediaries. At each step, it is re‑evaluated under local requirements. A minor discrepancy such as a naming variation can trigger delays, manual repair or rejection altogether. What should be a straightforward transaction becomes unnecessarily complex.

A single cross‑border payment can involve multiple anti‑money laundering checks, repeated know‑your‑customer (KYC) validation, sanctions screening and conflicting data localization rules. Each layer is necessary in isolation. Together, they create redundancy, inconsistency and cost.

This fragmentation has material consequences. Cross-border payments remain significantly more expensive than domestic ones, driven not only by infrastructure limitations but by duplicated compliance and regulatory divergence.

Those costs are ultimately borne by end users. Migrant workers lose a meaningful share of remittances to fees. Small businesses face higher barriers to international trade. Financial institutions divert resources toward managing complexity rather than improving services.

Meanwhile, smaller payment providers, particularly fintechs, struggle to scale globally because navigating dozens of regulatory regimes requires capabilities that only large institutions can sustain.

Why payments need an ‘ICAO moment’

Aviation once faced a similar challenge. In its early years, global air travel was fragmented, with each country applying its own rules for safety, certification and operations. International flights were possible, but every border crossing introduced friction.

That changed in 1944 with the creation of a United Nations' specialized agency, the International Civil Aviation Organization (ICAO). The ICAO did not eliminate national oversight or replace local regulators. Instead, it aligned how rules were defined and applied, thereby creating common standards, enabling mutual recognition and establishing shared protocols.

As a result, a plane can travel from New York to London then Tokyo without re-proving its airworthiness at every stop. National authority remains intact, but the system functions as a coordinated whole.

Cross‑border payments have never experienced a similar moment of alignment. Payments may cross multiple jurisdictions, but at each point they are effectively treated as new transactions. Compliance checks are repeated, risk is reassessed, data is reformatted and rules are reinterpreted.

Standards exist, but implementation varies. Compliance is required, but rarely mutually recognized. Even progress such as ISO 20022 standard for financial messaging or regional payment linkages continues to operate within a fragmented regulatory environment.

In effect, cross-border payments today resemble aviation before shared global frameworks – functional but burdened by friction at every handoff.

Payment issues the industry can address now

Some of this friction can be reduced through industry-led action. Infrastructure-level innovation is already improving liquidity efficiency and reducing operational complexity.

In certain models, digital assets, including tokenized deposits or regulated stablecoins, can support more efficient liquidity management – helping reduce the need for pre-funded accounts and idle balances across the payment lifecycle.

This does not eliminate liquidity needs, especially in a real-time environment, but where the required market structure and controls exist, it can improve speed, cost and transparency.

Friction is also driven by the number of intermediaries involved in a typical transaction. Each additional hop adds cost, delay and opacity, and can introduce differing risk interpretations. More direct participation in, or connectivity to, domestic and last-mile payment systems – for example, via direct scheme or clearing access – can reduce hops and improve reliability and performance.

This is the approach Mastercard Move is taking today. By connecting directly to local payment schemes and trusted partners, it reduces intermediaries and delivers greater speed and predictability, giving senders and receivers clarity on both timing and final amounts. Regulated stablecoins are also being applied where appropriate for prefunding, settlement and payouts.

Beyond liquidity and connectivity, data remains a major opportunity. Broader adoption of ISO 20022 is essential, but only effective if market practice is aligned end-to-end. Consistent use of structured data – for parties, addresses, purpose and remittance information – reduces errors, investigations and delays.

Another important gain lies in reducing “avoidable failure”. Pre-validation services, standardized exception handling, and shared end-to-end tracking can prevent errors before payments are sent and make issues easier to resolve when they occur. Together, these improvements lead to faster resolution and more predictable outcomes for end users.

Reducing friction in cross-border payments

While these advances improve efficiency, they do not resolve the system’s underlying fragmentation. Even the most streamlined payment flows must still comply with multiple regulatory regimes, each applied independently. Addressing that challenge requires coordination across both public and private stakeholders.

The G20 Roadmap for Cross-border Payments was launched to rally public and private sector action around a straightforward goal: make cross-border payments cheaper, faster, more transparent and more accessible. It has helped build focus and accountability. But progress remain uneven – a reminder that technology can only go so far without greater consistency in how rules and requirements are applied across borders.

At the same time, policy-makers are placing greater emphasis on building resilient, secure and domestically governed payment infrastructure. These priorities are legitimate and local systems are essential. The challenge is that when national approaches evolve without interoperability in mind, they can unintentionally add friction at the border, reinforcing fragmentation rather than reducing it.

Over time, this fragmentation raises costs, limits choice and makes cross-border payments harder, not easier, for individuals and businesses.

Aviation offers a useful parallel. Global air travel scaled not through nationally unique systems alone, but through common standards and mutual recognition layered on top of national oversight. Payments face a similar choice: coordination that preserves national control while enabling global movement, or fragmentation that turns every border into a restart point.

A more durable path forward would be a neutral, globally oriented framework that brings greater consistency to how cross-border payments are governed – an “ICAO moment” for payments.

Such a moment would not require new authorities or a shift away from domestic oversight. It would require something more pragmatic: common standards, mutual recognition where risks are already addressed, and consistent approaches that allow innovation to safely and seamlessly scale payments across borders.