Demystifying liquidity in cross-border payments: challenges and solutions

Imagine a global payment system where money flows as seamlessly as data: no delays, no trapped capital, and no hidden costs. Achieving that vision hinges on one critical element: liquidity.

Whether you’re a digital wallet provider in Africa, a fintech in Southeast Asia, or a global bank moving funds across continents, liquidity is the engine behind every transaction. Yet, it remains one of the most complex and opaque aspects of cross-border payments.

Let’s explore the unseen infrastructure behind every cross-border transaction, and how Thunes is helping redefine it.

What does liquidity mean in cross-border payments?

Liquidity refers to the availability of funds, in the right place, at the right time and in the right currency, to fulfil payment obligations. In the world of cross-border payments, this means having immediate access to local currencies in various markets to enable real-time or near-instant settlement.

For instance, when a consumer in France sends money to Kenya, or a business in Singapore pays a supplier in China, the funds must be accessible in the recipient’s currency and jurisdiction. Without adequate liquidity in that destination market, the transaction grinds to a halt.

Traditionally, this challenge has been managed through pre-funding Nostro accounts in multiple countries, a model that ensures reliability and settlement certainty. However, it also ties up working capital and can limit flexibility as companies scale. Thunes’ approach optimises pre-funding, freeing up capital where possible and enhancing liquidity visibility across its global network.

Why Liquidity Matters More Than Ever

As the global economy accelerates towards digital payments, expectations for speed, reliability, and transparency continue to rise. For cross-border transactions to keep pace, liquidity needs to be managed with greater precision and agility.

Here’s why it matters:

• Speed is critical: A lack of liquidity can delay payments, erode customer trust, and result in missed business opportunities.
• Cost efficiency: Traditional liquidity strategies, such as maintaining funds across multiple Nostro accounts and working with various intermediaries, are essential for ensuring coverage and reliability. However, without the right tools, these approaches can become capital-intensive.
• Scalability: Entering new markets requires access to local liquidity, which can be both complex and capital-intensive. Without the right infrastructure, global expansion becomes far more costly.

For treasury teams and financial service providers, this means balancing liquidity demands with the realities of a fast-moving market, evolving regulations, and volatile FX conditions.

Key liquidity challenges in cross-border payments

Despite rapid innovation in payment technology, several fundamental challenges continue to hinder liquidity management:

• Pre-funding and trapped capital: Because not all cross-border payment corridors support instant settlement, maintaining pre-funded accounts remains important in ensuring speed and reliability. However, managing this across multiple markets can lead to capital being underutilised.
• Fragmented infrastructure: Many national payment systems still operate in silos, lacking interoperability. As a result, cross-border transactions must pass through multiple intermediaries, each adding cost, delays, and additional liquidity requirements.
• Regulatory barriers: FX controls, compliance checks, and licensing requirements vary widely across markets, complicating liquidity planning. Jurisdictions with strict capital controls often require additional buffers and local partners to manage funds legally and effectively.
• FX risk and volatility: Operating across multiple currencies exposes businesses to foreign exchange risk. While some institutions have access to hedging and forecasting tools, many fintechs and smaller providers, particularly those in emerging markets – do not.

These challenges are especially acute for mobile network operators, digital wallets, and fintechs operating in emerging markets, where infrastructure may still be developing and access to hard currency is often constrained. In parts of Southeast Asia or Africa, underdeveloped banking systems and strict capital controls can create persistent liquidity bottlenecks.

Innovation on the Rise

To reduce the friction and cost of managing liquidity, the industry is turning to a range of new technologies and strategic models:

• Stablecoins like USDC offer real-time settlement and reduce the need for pre-funded accounts. With 24/7 availability, they enable value transfer beyond the constraints of traditional banking hours.
• Making legacy and mobile wallet systems interoperable with Digital Asset Ecosystems, examples such as Thunes’ partnership with Circle are creating shared infrastructure that pools liquidity and reduces redundancy. By supporting net settlement or shared corridors, these models help free up capital.
• Real-time payment (RTP) networks: These are on the rise globally, enabling faster, lower-cost transfers within and between countries. By reducing settlement timeframes, RTP networks improve liquidity velocity and reduce the need for large buffers.
• Advanced treasury tools, powered by automation and real-time data are improving liquidity forecasting, routing, and fund distribution. These systems enable faster, smarter, and more informed decision-making.

While these innovations are starting to transform how liquidity is managed, they require strong underlying infrastructure and seamless integration across markets. Success depends on thinking globally, while executing with local precision.

Thunes’ SmartX Treasury System

Thunes is at the forefront of liquidity innovation with its SmartX Treasury system – built to support real-time, multi-currency payments across 130 countries.

Here’s how it works:

• Flexible FX options: Freedom to choose between real-time or locked-in FX rates depending on liquidity requirements. This reduces idle capital and removes the need to maintain large balances in every market.
• Flexible Settlement: Freedom to choose settlement timing and currencies based on business needs. Funds move on your terms, improving cash flow and operational agility.
• Automated conversion: Reduces manual conversion requests with pre-set rules and conditions, streamlining cross-border operations and reducing risk.

The SmartX Treasury System is purpose-built to give payment providers, mobile wallets and platforms in emerging markets an edge, offering 100% transparent pricing and real-time visibility, enhanced operational efficiency across currencies, and optimised working capital through AI-powered forecasting and on-demand liquidity.

This infrastructure optimises treasury management and powers our global payment capabilities, enabling fast, reliable payouts and seamless acceptance through 320 different payment methods.

With SmartX as the backbone, Members of Thunes’ Direct Global Network can scale more efficiently, without the burden of pre-funding dozens of local accounts or managing multiple banking relationships.

A Future-Ready Approach

As global payment volumes continue to grow, the demand on liquidity systems are only intensifying. Instant payments, embedded finance, and digital commerce all rely on one thing: real-time access to funds. Providers that can deliver this consistently will earn the trust of customers, partners, and regulators alike.

This is especially valuable for digital wallet and mobile money operators in emerging markets. With faster payouts, they can power critical use cases like remittances, gig economy, and supplier disbursements – faster and more cost-effectively.

Thunes’ SmartX Treasury is a strategic enabler that redefines liquidity management. By integrating digital assets like USDC into its infrastructure, Thunes enables 24/7 access to liquidity, including weekends and holidays, for partners who pre-fund in USDC. This always-on model bypasses traditional banking cut-off times, accelerates settlement speeds, and significantly reduces the capital typically locked in local accounts. Thunes continues to optimise liquidity for fiat corridors through intelligent forecasting, dynamic allocation, and real-time treasury controls, ensuring efficient access to funds across its global network.

Importantly, instant settlements also help mitigate the risk of foreign exchange fluctuations. By enabling real-time execution, businesses can transfer funds precisely instantly, thereby avoiding the uncertainty of overnight or weekend foreign exchange (FX) exposure. This precision improves both financial predictability and working capital efficiency, particularly for high-volume and small-margin use cases. With full traceability built into every transaction, financial teams gain the transparency they need to monitor flows and make confident, data-driven decisions.

As interoperability improves and more countries adopt real-time infrastructure, solutions like the SmartX Treasury System will be critical to powering the liquidity layer of the modern global economy.

What’s on the horizon?

Liquidity is the silent powerhouse behind global commerce. In cross-border payments, it determines how fast money moves, how much it costs, and how reliable the experience is. Yet managing liquidity across jurisdictions, currencies, and compliance regimes remains a significant operational challenge.

Thunes’ SmartX Treasury transforms this complexity into an advantage, dynamically optimising liquidity while giving partners the tools to operate globally without tying up capital.

For financial institutions, fintechs, mobile wallet providers, and mobile network operators, this means one thing: the ability to scale without friction. As digital payments continue to reshape economies, smarter liquidity solutions like SmartX Treasury will be at the core of the next phase of global payments growth.

Contact us to learn how we can support your cross-border strategy – with real-time access, full transparency, and intelligent automation built in.