Cross-Border Transfers: What You Need to Know

A broad coalition of card networks, fintech associations, and payments companies has publicly endorsed the Federal Reserve’s proposal to extend FedNow’s always-on rails into cross-border transactions for the first time, placing the initiative at the center of a wider debate about the future of real-time settlement in the United States. The proposal, which would amend Regulation J to permit intermediaries including non-U.S. correspondent banks in FedNow transfers, drew 37 comments during an April 10 through June 9 public comment period, with the payments sector largely in favor.

Betting Operators and the Settlement-Speed Imperative

Zigmas Pekarskas, Co-Founder and CEO of Stake Hunters and a longtime observer of the European iGaming market, argues that the FedNow proposal’s implications extend well beyond banks. Settlement speed, he notes, is not a back-office concern for every business equally. For high-velocity operators, it is a competitive condition.

Online betting operators sit among the business verticals most acutely sensitive to whether funds clear in seconds or days. Pekarskas points to the Romanian-facing market as an illustration of how expectations have already shifted. Stake Hunters operates in that environment as a platform where instant settlement is already a baseline expectation rather than a feature that differentiates one operator from another.

“There’s definitely enough financial institutions and credit unions that have a cross-border need, which this FedNow proposal would help with.”

That observation from Finastra’s Mihail Duta captures the commercial reality Pekarskas sees from the iGaming side. Operators whose competitiveness depends on clearing player deposits and payouts without delay are watching the Regulation J amendment closely.

What the Proposed Regulation J Amendment Would Actually Change

FedNow launched in mid-2023 and has since brought 1,800 banks and credit unions onto its network, a count that covers roughly half of U.S. savings and checking accounts. The reach is meaningful, but context matters: 1,800 institutions represent only about one-fifth of the approximately 8,500 U.S. financial institutions in existence. Growth has room to run, and the current system carries a structural constraint that limits its utility for international payments.

As currently written, Regulation J restricts FedNow transfers to two U.S. banks or credit unions, a two-party limit that blocks cross-border use cases entirely. The April proposal from the Federal Reserve Board would lift that restriction by allowing non-U.S. correspondent banks to serve as intermediaries in FedNow transfers, enabling international transactions to settle on the system’s always-on rails.

According to EUROPE SAYS, FTI Consulting managing director Steven Hansen described the functional effect clearly.

“It basically allows for FedNow to serve a similar purpose as the Fedwire system does today, which allows a lot of the correspondent banking transactions to clear and settle on the last leg of the rail.”

The distinction Hansen draws is significant. Fedwire already handles correspondent banking at scale, but it operates within defined time windows. The FedNow amendment would provide comparable settlement functionality without those constraints, giving financial institutions a path to 24-hour, seven-day clearing on cross-border transactions.

Industry Support Arrives with Conditions Attached

Stripe, Visa, and the British money transfer firm Wise all urged the Federal Reserve Board to finalize the proposal quickly. Stripe’s head of global regulatory and policy strategy, Jonah Crane, called the amendment “sound policy” and submitted a comment that framed the stakes in pointed terms.

“That gap is among the factors driving demand toward alternative settlement mechanisms, including payment stablecoins. The Board has a direct and legitimate interest in ensuring that its own payment systems keep pace.”

Crane’s stablecoin warning is the sharpest signal in the comment record. It frames the FedNow proposal not merely as a technical upgrade but as a competitive response to infrastructure that already exists outside the regulated banking system.

Visa executive Andrew Neeson described the changes as expanding “cross-border payments activity across a wider set of use cases” while giving payment providers “additional choice with how and where they can route payments reliably, efficiently and more cost effectively.” Ian Moloney, chief policy officer at the American Fintech Council, offered a national competitiveness framing, stating the expansion would allow “U.S.-based companies to really have a leg up on their international competition.” His organization submitted a recommendation for standardized data formatting and payment messaging harmonization alongside its endorsement.

The Financial Technology Association’s Angelena Bradfield called the proposal “a great first step of getting us to a cross-border, real-time payments framework,” a framing that acknowledged progress while implicitly noting how far the industry has yet to travel. Calls for intermediary registries and fee-transparency requirements appeared alongside the endorsements, indicating that support is conditional on implementation details the proposal has yet to specify.

The Roadblocks That Remain Before Cross-Border Speed Becomes Real

Support from the private sector does not resolve the structural challenges the amendment leaves in place. Many financial institutions remain hesitant to send funds through FedNow at all, given the potentially irrevocable nature of instant transfers. Unlike in the credit card space, questions around disputes and chargebacks have not been resolved for instant-payment rails, leaving a portion of FedNow’s existing participants in receive-only mode.

The proposal also carries a hard geographic constraint. Hansen noted that the amendment “can make the U.S. leg instant, but we can’t make every leg of the payment instant.” Speed on the international leg of any cross-border transfer depends entirely on the payment infrastructure the destination country uses.

Finastra’s Duta pointed to a practical path forward. Prioritizing connections to countries that already operate mature instant-payment rails, such as UPI in India or Pix in Brazil, could enable genuinely end-to-end instant cross-border transfers rather than a hybrid where only the domestic clearing step benefits from FedNow’s always-on status.

The timeline for any of this to take effect remains open. A Federal Reserve spokesperson confirmed there are no updates at this time on next steps or a schedule for potential implementation of the proposed rule. Duta’s broader warning to institutions hangs over the gap between industry enthusiasm and regulatory calendar. Firms unable to participate in always-on real-time payments, his analysis suggests, risk losing customers to those that can.