New Ways to Pay Cross-Border Transactions

Thanks to financial technology innovation, the movement of money across borders has changed dramatically in the last five years.

The banking laws and financial infrastructure of each Caribbean nation historically made it difficult to complete cross-border transactions, resulting in astronomical transaction fees for these cross-border payments. In recent months the need for alternative methods has become more pronounced as Caribbean banks have faced difficulties working with correspondent banks, a necessary component of international money transfers.

Today, the region is appreciating a much-needed, new development. The financial innovation that lowered the cost of transactions between the United Kingdom and the Netherlands is now available for transactions between Dutch St. Maarten and English Anguilla.

The methods for cross-border transactions in the Caribbean fall into three distinct categories: payment to pre-paid credit or debit cards, payment to e-wallets, and payment using digital currency. Let’s take a look at what each option offers.

Pre-Paid Credit and Debit Cards

With a pre-paid credit or debit card, merchants or individuals can “load” funds into the account of the card they possess. The transfer can take place from either the sender’s bank account or other method into the account of the card. The card owner can then use that card for their daily expenses, their own cross-border payments, or even withdraw from an ATM.

Payoneer is a pre-paid MasterCard debit card that enables individuals to receive payments and marketplaces from around the world.  It’s best known as a payout option for hosts renting on Airbnb or contractors providing services on Upwork or other markets. At the same time, individual companies in the Caribbean or Europe can establish Payoneer accounts and pay suppliers or contractors.

For reaching U.S. partners, MasterCard provides a new method called MasterCard Send.  This allows merchants or individuals to send funds to all U.S. debit card accounts.


An electronic wallet (e-Wallet) facilitates electronic commerce by making it easier to store funds and then pay. Transactions can be quickly settled by transferring funds from one client’s e-wallet to another, independent of geographical borders. This transfer is generally instantaneous and is usually executed at a low commission rate.

How funds are actually deposited into the wallet, and on the other side of the transaction, how the funds are withdrawn as cash, can be complicated with e-wallets, depending on the country,

The most popular e-wallet company is PayPal, which allows funds to be transferred across borders for both personal and business reasons.  They have numerous process for loading the wallet and for spending the received funds.  Most common are the thousands of websites that are integrated with PayPal to allow settlement of transaction.

PayPal also allows business clients to apply for a MasterCard Business Card that acts as a debit card and can be used wherever MasterCard is accepted. The card may also be used to withdraw funds from any ATM. In the Caribbean there are restrictions on individuals and business regarding the  deposit and withdrawal of funds, so be sure to review the information for your country.

Another e-wallet company is Neteller, which is available in the Caribbean and operates in a similar way to PayPal. Funds can be used to settle purchases online or pay individuals around the globe by transferring funds from one wallet to the other.

Digital Currency

The advent and expansion of digital currencies such as Bitcoin and Ethereum allow for frictionless transfer of funds across borders.  Since you are transferring what is essentially a digital id that does not exist in physical form, it can be transferred seamlessly across borders.

The cost of transfer and ease of transfer are the benefits of digital currency, however there is a shortage of businesses that accept the currency. Additionally, it is difficult to convert the currency to actual cash.

The Caribbean company Bitt is working to make digital currency more available to Caribbean consumers and businesses.  This will be helped by a recent investment of $4 million from U.S. retailer

It should also be noted that some cash transfer companies such as Western Union have improved upon their technology to make it easier for the sender to digitally send the funds, but the receiver still needs to collect the payment in person and depending on the amount of the transfer, the fees can be high.

The new methods of cross-border payment and the increasingly connected world have made it simpler for small business owners to expand their transactional reach. Ongoing developments in this space are promising.

Follow Ian Haet on Twitter @IanHaet and learn more about his experience in the Caribbean and Latin America.

Ian Haet
Ian Haet
Ian Haet was the CEO and Co-Founder of the Startup Stock Exchange (SSX) headquartered in Curacao, Dutch Caribbean until he sold it in April 2016. He has started and operated numerous online businesses in the Caribbean and Latin America. He is an expert in business development, digital marketing, and startup operations. He is currently focused on building his next business in LATAM.

See all posts by Ian Haet

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