Payments are becoming real-time. Regulation isn’t

Payments are becoming real-time. Regulation isn't

Money moves faster than ever. Instant payment schemes are multiplying, SEPA and account-to-account rails are pushing settlement toward seconds, and card networks keep shaving time off cross-border transactions. McKinsey expects instant payments volumes to grow 15–18% a year. Finextra's latest European research puts interoperability and cross-border regulation at the top of the sector's open questions for 2026. For Anastasiia Pervushyna, Director at Sends, this raises a broader question: as the technology connecting payment systems becomes increasingly interoperable, why isn't the regulatory infrastructure keeping pace?

The technology problem is basically solved. Multi-rail stacks blending cards, instant payments and account-to-account transfers are now just how things are built. The result is an increasingly multi-rail payments ecosystem. For fintechs, the question is shifting from how can we move this payment? to which rail should we use?

But there is another layer of the cross-border stack that has not become nearly as interoperable: regulation. The FSB's G20 cross-border payments roadmap is organised around three themes: payment system interoperability, data exchange standards, and legal and regulatory frameworks.

What isn't keeping up is the rulebook that travels alongside the money — AML checks, data residency, onboarding, monitoring thresholds. PwC and others have tracked a widening gap here. Regulatory divergence between jurisdictions is growing, not shrinking, even as the pipes connecting them get faster.

Licensing is where this bites first, and it's not subtle. Inside the EU, a payment or e-money licence is passported across all EEA states — one authorisation, access to the whole bloc. Step outside the EU and that logic disappears entirely. A firm expanding from Europe into the US doesn't face one regime. It faces a state-by-state money transmitter patchwork, each state with its own capital requirements, bonding, and reporting. Add the UK, Singapore, a Gulf market or two, and a mid-sized payments firm can end up holding a dozen licences to do the exact same thing everywhere: hold client money and move it safely. None of that is about how fast the transfer clears. It's the overhead of proving, in slightly different paperwork each time, that you're allowed to do it at all.

AML runs into the same wall, just at bigger scale. FATF's Recommendation 16, the so-called travel rule, has required institutions to exchange payer and payee information on wire transfers for years — long before it was ever extended to crypto. Implementation still varies a lot from country to country. FATF's own tracking shows plenty of jurisdictions that have passed the legislation but never actually checked whether anyone follows it. So a fully compliant institution ends up exchanging sensitive customer data with a correspondent bank operating under a regime that's weaker, or effectively unenforced.

That's really the bottleneck. Not just that rulebooks disagree with each other, but that money and the data describing it move at different speeds under different rules. An instant payment clears a border in seconds. The personal and financial data that verifies who sent it often can't move nearly that freely — data localisation requirements, restrictions on sending personal data abroad, inconsistent retention rules all get in the way of exactly the information compliance teams need from a foreign counterparty. The FSB has flagged this directly in its work on cross-border data frameworks: mismatched requirements, sharing restrictions, duplicated storage costs. Capital has never been closer to borderless. The data meant to travel with it safely is still very much stuck behind national lines.

For fintechs, that changes where the competitive advantage actually sits. Rail access is getting commoditised — plenty of providers can plug into SEPA or an instant payment scheme at roughly the same speed and cost. What's harder to copy is a compliance setup that can absorb regulatory divergence without being torn apart and rebuilt for every new market: onboarding logic you can reconfigure instead of rewrite, monitoring thresholds that are settings rather than baked-in assumptions.

The FSB already treats this as unfinished work, with active efforts to align data frameworks and harmonise how payment providers are supervised across borders. Full global alignment isn't coming any time soon, and honestly it doesn't have to. The EU's passporting model works precisely because it doesn't try to cover the whole world — just the corridor that actually matters to the people using it. A licence recognised across a region or bloc, whether that's the EU, a Gulf grouping, or an ASEAN-style arrangement, would remove a lot of the duplicated cost fintechs are absorbing right now. The same logic applies to data: agreements at the bloc level on what compliance data can cross which borders, and under what conditions, would probably do more for cross-border payments than another round of faster settlement rails.

Fintechs that want to operate at the speed their rails now allow have a reason to be in that conversation. Not because alignment is coming fast — it isn't — but because until it does, the firms that do well will be the ones whose systems were built to bend around divergence instead of pretending it will go away.

About the author

Anastasiia Pervushyna is Director at Smartflow Payments Limited (Sends), with over 10 years of experience in payments across the UK, Europe, and Ukraine. Her focus is on the regulatory and licensing challenges fintechs face when scaling cross-border operations