A cross-border collection is the receipt of funds by a business from a payer located in another country, whether the payer pushes the money by bank transfer or the business pulls it by card or direct debit. Examples include an online shop charging foreign customers, a software company collecting subscriptions worldwide and an exporter receiving payment from an overseas buyer. Collections may arrive as international wire transfers, cross-border card payments or through payment providers that aggregate funds.
Cross-border collections are often slower and more expensive than domestic ones because of correspondent charges, cross-border fees and currency conversion. Many firms therefore use in-country collection, receiving payments through local accounts or local payment methods in each market and then moving the pooled funds home, which reduces costs and is more familiar to payers. Reconciliation of incoming payments, including matching references and handling short payments, is a central part of managing collections.