Cost drivers include SWIFT connectivity, multi-jurisdictional AML/KYC compliance, and legacy settlement infrastructure.

Mid-tier cross-border payment operators incur ongoing operational expenditure of S$2–5 million annually across three primary cost drivers: settlement network fees, SWIFT connectivity, and multi-jurisdictional compliance coverage. This cost burden is structural, rooted in legacy infrastructure and fragmented regulatory frameworks, and it directly constrains scalability for operators that lack the volume to amortize fixed costs across a large transaction base. With the global cross-border payments market valued at approximately $195 trillion in 2024 and projected to reach $320 trillion by 2032 — and non-wholesale payments alone growing from $40 trillion to $64.5 trillion over the same period — the pressure on mid-tier operators to contain these costs while capturing market share is intensifying.

The Cost Structure of Mid-Tier Cross-Border Payment Operators

The S$2–5 million annual opex estimate for mid-tier operators is anchored in three interdependent cost categories. Settlement network fees cover the cost of connecting to real-time gross settlement (RTGS) systems, correspondent banking networks, and alternative payment rails. SWIFT connectivity costs include membership fees, messaging charges, and the operational overhead of maintaining secure gateways. Multi-jurisdictional compliance costs span licensing fees, AML/CFT screening infrastructure, sanctions list management, and ongoing regulatory reporting across each jurisdiction in which the operator does business.

According to the Monetary Authority of Singapore's analysis of cross-border interbank payments, costs arising from treasury operations, compliance, and payment operations can be grouped broadly under operational costs, and a significant portion of these arises from legacy infrastructure. The same analysis notes that certain cost drivers — specifically foreign exchange risk and higher compliance requirements — are inherent to cross-border payments and cannot be eliminated entirely.

The context for mid-tier operators is a market that is both enormous and fast-growing. FXC Intelligence data cited by Circle pegs the global cross-border payments market at roughly $195 trillion in 2024, with projections to around $320 trillion by 2032. Non-wholesale payments, which are the primary addressable market for mid-tier operators, accounted for approximately $40 trillion in 2024 and are expected to expand to $64.5 trillion by 2032 — growth of over 60%.

Market Value ($T)Source: Orionmano Industries

Settlement Network and SWIFT Connectivity Costs

Settlement infrastructure costs constitute a major portion of the S$2–5 million opex range for mid-tier operators. The core issue is that most cross-border payment flows still rely on correspondent banking networks and SWIFT messaging, systems designed decades ago for batch processing rather than real-time settlement. The costs are not merely financial but operational: treasury teams must manage liquidity across multiple nostro accounts, reconcile delayed settlements, and absorb the friction of non-standardized messaging formats.

The speed data from the Financial Stability Board (FSB) illustrates the inefficiency. In 2024, 89% of wholesale payments using SWIFT completed settlement within one hour. For business-to-business (B2B) and business-to-person (B2P) services offered by payment service providers, the numbers are dramatically lower: only 5.9% of B2B payment services and 4.9% of B2P services offered settlement within one hour. This gap means mid-tier operators serving non-wholesale customers are effectively subsidizing slower infrastructure, with costs embedded in SWIFT message fees, exception handling, and manual reconciliation processes.

The FSB's 2024 progress report shows that the average cost of B2B cross-border payments was 1.6% of transaction value — the closest to the FSB's 1% target among all use cases. P2P non-remittance payments averaged 2.6%, while B2P and P2B payments each averaged 2.0%. For mid-tier operators processing billions of dollars annually, even a few basis points of cost differential translate directly into margin pressure.

Cost (% of transaction value) (%)Source: Orionmano Industries

Multi-Jurisdictional Compliance Expenses

The most structurally intractable cost driver for mid-tier operators is multi-jurisdictional compliance. Each regulated financial institution in a cross-border payment chain is independently responsible for AML, CFT, and sanctions screening checks. As Circle's analysis notes, this means "the same payment can be reviewed multiple times using different rule sets and data standards, multiplying cost and delay across the network."

The licensing requirements alone illustrate the breadth of coverage needed. Thunes, a mid-tier cross-border payment platform, holds regulatory authorizations including: a Certified Money Service Business designation with FinCEN and a Money Transmitter License in Washington State (USA); a Payment Institution License from the ACPR (France) with extension across the EU; Authorised Payment Institution status with the FCA (UK); a Major Payment Institution license from the Monetary Authority of Singapore; and a Money Service Operator License from Hong Kong Customs. Each license carries application fees, ongoing compliance reporting obligations, periodic audits, and the operational overhead of maintaining local legal counsel and compliance teams.

The Monetary Authority of Singapore's report identifies compliance requirements as a key cost driver inherent in cross-border payments, noting that banks and payment service providers face "higher compliance requirements" that are not present in domestic payment systems. For mid-tier operators without the scale to centralize compliance functions or negotiate regulatory efficiencies, these costs are essentially fixed.

The real-world impact is visible in remittance costs. The World Bank estimates average remittance fees at approximately 6.5% as of March 2025, far above the UN's global target of 3%. While remittance fees include FX margins and intermediary bank charges, compliance costs represent a meaningful and non-discretionary component.

Outlook: Modernization as a Competitive Imperative

As market growth accelerates — from $195 trillion to $320 trillion by 2032 — and the FSB pushes for cost reduction (targeting 1% average cost) and speed improvements (targeting near-instant settlement), mid-tier operators face a clear strategic choice. The S$2–5 million annual opex burden will become increasingly untenable for operators that cannot amortize it across growing transaction volumes.

The path forward requires investment in two areas. First, modern settlement rails — including direct RTGS access, blockchain-based settlement, or partnerships with platforms offering real-time gross settlement capabilities — can reduce SWIFT dependency and associated messaging costs. Second, automated compliance tools — including shared KYC utilities, blockchain-based identity verification, and AI-driven transaction monitoring — can reduce the multiplied compliance costs inherent in multi-jurisdictional operations. Operators that make these investments will be positioned to capture share as the market expands; those that do not will see the S$2–5 million opex burden erode margins and limit growth.