Cross-Border Payments Become a Battleground for Loyalty in Latin America and the Caribbean, Mastercard and FXC Intelligence research shows

• Qualitative SME panel research found that 9 in 10 businesses interviewed would consider switching cross-border providers, placing up to approximately 70% of their cross-border payment volumes potentially at risk
• SMEs are navigating a rapidly growing and increasingly complex cross-border payments market shaped by operational friction and uncertainty
• Even a 1% shift in payment flows could represent approximately US$230 million in annual revenue at stake for banks and fintechs across the region

Cross-border payments are becoming the first point of fragmentation in banking relationships across Latin America and the Caribbean, as small and medium-sized enterprises (SMEs) increasingly reallocate international payment flows in search of greater predictability, transparency, and operational efficiency. New research from Mastercard, developed in partnership with FXC Intelligence, the leading provider of cross-border payments data and intelligence, shows that SME cross-border payments represent a significant and growing opportunity in Latin America and the Caribbean. Bank and payment company revenues from servicing these transactions are estimated at approximately US$23 billion annually.

At the same time, the market is becoming increasingly dynamic. In qualitative SME panel research across Mexico, Brazil and Colombia, 9 out of 10 businesses interviewed said they would consider switching cross-border providers. Together, those businesses indicated that up to approximately 70% of their cross-border payment volumes could be open to migration as expectations around payment performance continue to rise. While many SMEs maintain their core banking relationships for domestic services such as credit, payroll, and collections, cross-border payments are being rerouted corridor by corridor. As a result, financial institutions risk remaining the “primary bank” in name, while losing economically meaningful wallet share in practice.

Today, SMEs are actively redistributing payment flows toward providers that deliver more consistent outcomes, stronger visibility, and lower operational effort. Even modest shifts in payment behavior can have meaningful commercial impact. The research indicates that every 1% movement in cross-border payment flows could represent approximately US$230 million in annual revenue at stake for banks and fintechs across the region.

As cross-border payment volumes grow, so does their operational complexity. SMEs across the region face a range of recurring burdens that extend beyond cost alone. The study highlights:

• Operational friction: A typical cross-border payment requires multiple manual steps and internal coordination.
• Exception handling: Approximately 1 in 9 payments requires investigation, repair, or follow-up.
• Time burden: Problematic transactions can consume up to 3.5 hours of staff time.
• The “uncertainty tax”: SMEs often lack clarity on when payments will arrive, how much will be received, and what deductions will apply.

As these burdens accumulate, they are directly influencing how SMEs select and use financial providers. Businesses are no longer relying on a single institution. Instead, many are:

• Routing payments across multiple providers.
• Allocating flows based on reliability and predictability.
• Testing alternative options corridor by corridor.

“Cross-border payments are no longer just a transaction. They are a decisive moment in the customer relationship,” said Walter Pimenta, executive vice president, Commercial and New Payment Flows, Mastercard Latin America and the Caribbean. “This new research sends a clear signal to banks and providers. When SMEs cannot rely on predictability and visibility, they begin to reallocate payment flows. When that shift starts, it can extend beyond payments into the broader banking relationship.”

“Cross-border payments are where many SME banking relationships start to fragment,” said Daniel Webber, CEO, FXC Intelligence. “When payments are slow, opaque or difficult to resolve, businesses do not wait for the system to improve. They start moving flows to providers that give them more certainty.”

With cross-border trade expected to continue expanding and SME participation increasing, financial institutions face growing pressure to modernize their capabilities and deliver more reliable, transparent payment experiences. Through Mastercard Move, financial institutions and payment providers can help address these challenges by:

• Improving payment visibility and tracking.
• Delivering more predictable settlement outcomes.
• Reducing manual processes and exception rates.
• Enhancing transparency around fees and final payment amounts.

By enabling a more seamless and reliable cross-border experience, Mastercard is helping institutions strengthen relationships, retain payment flows, and support SME growth across Latin America and the Caribbean.

Scope and methodology of research

The findings presented are based on research developed by Mastercard in partnership with FXC Intelligence. The research included a qualitative panel of small and medium-sized enterprises interviewed across Mexico, Brazil and Colombia to understand operational challenges, provider choices and cross-border payment behaviors. These findings are supplemented by Mastercard’s broader research and FXC’s market analysis of cross-border payment trends in Latin America and globally. The qualitative insights reflect recurring patterns among the businesses interviewed and are intended to indicate directional trends, not statistically representative market-wide results.