The Hidden Power of Cross-Border Payments: Building the Bridge to Financial Inclusion

Digital remittances were supposed to fix this. And to a degree, they have: in countries like Kenya, mobile money has helped millions go from cash-only to fully banked. But major barriers remain: costs are still high, many corridors lack infrastructure, and billions are excluded by KYC requirements or lack of digital ID.

The promise is there. But unless the system becomes truly inclusive and frictionless, it’s the people who need it most who will keep paying the highest price.

Apart from being faster, digital remittances are transformative. In India, over $120 billion in remittances flowed in during 2025, much of it digitally. Across Sub-Saharan Africa and Southeast Asia, mobile wallets like M-Pesa, GCash, MoMo, and GoPay help families cover daily essentials and emergencies without relying on unstable local banks.

This shift is real: the digital remittance market is growing fast, with usage in LMICs rising over 15% year-on-year. But there’s a catch. A large share of recipients still collect funds in cash, not because they want to, but because they have no bank account, no ID, or even a smartphone. According to the latest available data from the World Bank, nearly 1.4 billion adults are likely to be unbanked, and most live in regions that rely heavily on remittances.

The money may arrive digitally, but if it hits a dead end in the last mile, the full potential of cross-border payments never reaches the people it’s meant to help.

Technology alone doesn’t bank the unbanked. You can launch the best wallet in the world, but if a rural worker has no smartphone, no ID, and no trust in the system, adoption won’t follow. True financial inclusion demands infrastructure, education, and smart policy.

Take India Stack, a country’s public digital infrastructure. By combining biometric ID (Aadhaar), real-time payments (UPI), and data-sharing protocols, it enabled millions to open bank accounts, access credit, and transact digitally. By the end of 2025, more than 500 million Indians will use UPI, with QR codes now common even among small vendors.

Elsewhere, fintech often outpaces public systems. Despite a booming startup scene led by firms like Flutterwave and OPay in Nigeria, over 100 million people remain without a National Identification Number (NIN) as of March 2025. Without it, they’re excluded from most digital financial services. The technology is there, but without accessible ID systems and flexible KYC rules, the system doesn’t reach far enough.

In Venezuela, where inflation continues to erode the value of the bolívar, many families now rely on USDT to receive support from relatives abroad. Instead of using traditional banks, transfers often happen through Telegram bots, P2P platforms, or non-custodial wallets. These channels work around capital controls and offer a faster, more reliable alternative to legacy systems.

This model is spreading. In high-fee corridors like US—Mexico, or in regions with limited access to traditional banks, blockchain-based payments are becoming more common. Chainalysis reports that stablecoins are now the most-used crypto asset in many developing economies, especially where local currencies are volatile or hard to access.

Someone working abroad can now send USDC back home in seconds using a mobile wallet, skipping the 7% fee charged by traditional remittance services. The recipient without a bank account cashes it out through a local crypto agent in their currency, without waiting in line or filling out paperwork.

On/off-ramp tools make these flows possible. And with non-custodial wallets, users can receive and manage funds independently. This is a practical example of how financial tools can serve those left out by banks.

In many parts of the world, sending money across borders still feels like navigating red tape. Fragmented regulations, strict capital controls, and inconsistent licensing requirements limit the reach of digital remittance providers. A mobile wallet approved in Kenya might be blocked in Uganda. In some countries, users can receive crypto but can’t legally convert it into local currency, making the system unusable in practice.

These regulatory gaps have a price. According to the World Bank, the average cost of sending money to Sub-Saharan Africa reached 8.47% in Q3 2024, the highest of any region globally. A $100 remittance might lose over $8 to fees before reaching the recipient. And smaller payments, which matter most to low-income families, often face even higher rates.

Decentralized networks can reduce those costs by cutting out intermediaries. But without regulatory coordination across borders, their reach stays limited. The infrastructure is there; the system around it needs to align.

Compliance is one of the biggest friction points in global payments. Verifying identities, checking documents, and monitoring for fraud can take days, especially across jurisdictions. In 2025, many payment providers are turning to AI and machine learning to automate tasks like ID checks and fraud detection. These systems help reduce manual workload and catch risks that might go unnoticed in traditional reviews.

On/off-ramp services benefit directly. Faster KYC processes and real-time screening make it easier to comply with local regulations without slowing users down. In India, banks and fintechs are using AI-based video KYC to onboard new users in minutes, even in areas with limited access to physical infrastructure.

Paired with blockchain, which offers a clear, traceable record of each transaction, these technologies help reduce overhead and simplify compliance. That means cross-border payments can be processed more quickly and with fewer delays without sacrificing control or oversight.

Financial inclusion doesn’t stop at access. It requires reliability, affordability, and systems that adapt to people’s real needs. That means building stronger infrastructure, including mobile networks in rural regions or digital ID systems that work for everyone.

Policies must evolve, too. Regulatory frameworks that treat all users the same often exclude the ones who need the most flexibility, like migrant workers, informal traders, or those living without proof of address. Inclusive design starts with inclusive rules.

Public-private partnerships play a critical role here. Governments can build identity rails and legal clarity. Fintechs can scale fast and build around user needs. Together, they can unlock systems that work for people.