Cross-border payments typically occur when the originator and beneficiary, or their banks, are located in different countries or where the currency used for the payments is not the currency of the country where the transaction originates. For example, U.S. dollars may be used to make a payment between parties each located in a different foreign country.
Structurally, there are usually two components to these cross-border payments: (1) the instructions, which contain information about the originator and beneficiary of the funds, and (2) the actual funds transfer. The payment instructions for cross-border payments typically are sent to an intermediary bank using industry financial telecommunications systems, such as the Society for Worldwide Interbank Financial Telecommunication (SWIFT).