Key Highlights
| Insight | Why It Matters |
| China–Latin America trade expanding | Payment infrastructure is increasingly a strategic advantage |
| USD dependency creates hidden costs | Multiple FX conversions reduce operational efficiency |
| Local currency networks emerging | Businesses can move funds with fewer intermediaries |
| Bank–fintech partnerships accelerating | New collection, FX, and settlement capabilities improve cash flow visibility |
Introduction: Payment Infrastructure Behind Modern Trade
Trade between China and Latin America continues to grow, with countries like Brazil, Mexico, Chile, Peru, and Colombia increasingly relying on Chinese manufacturing for industrial equipment, electronics, and consumer products. While logistics networks have become more sophisticated, the underlying payment infrastructure has lagged behind, creating friction that affects working capital, procurement speed, and supplier relationships.
In 2026, businesses are recognizing that efficient cross-border payment infrastructure is not just operational—it is a competitive differentiator. Local currency collection, multi-currency settlement, and automated compliance tools are emerging as key enablers for SMEs in international trade.
Why Traditional Cross-Border Payments Are Becoming a Bottleneck
Traditional cross-border payments often rely on USD as an intermediary currency and involve multiple correspondent banks. A typical payment from Latin America to China may include steps such as:
Local Currency (BRL, MXN, CLP)
↓
USD Conversion (at local bank)
↓
Correspondent Bank (intermediary)
↓
Intermediary Bank (clearing)
↓
Receiving Bank (in China)
↓
Supplier Account (CNY conversion)
Each step introduces:
- Costs:Multiple fees from intermediaries and FX spreads
- Time:Settlement can take 7–10 business days
- Operational complexity:Tracking payments across institutions is challenging
- FX exposure:Each conversion increases vulnerability to exchange-rate fluctuations
For SMEs processing multiple payments per month, these inefficiencies compound, creating delays in procurement and cash flow challenges.
The Rise of Local Currency Settlement Networks
To address these inefficiencies, regional payment networks are increasingly enabling direct settlement in local currencies:
- PIX (Brazil):Real-time payment system enabling instant transfers
- SPEI (Mexico):Same-day electronic interbank payment system
- Other Latin American networks:Many countries now offer modern domestic payment rails
Local collection accounts and direct settlement reduce reliance on USD, simplify reconciliation, and improve transparency of FX costs.
Virtual Accounts and Multi-Currency Wallets Improve Trade Flows
Modern payment infrastructure combines:
- Local collection accounts:Receive funds in local currency
- Virtual accounts:Dedicated accounts for specific suppliers or purposes
- Multi-currency wallets:Manage BRL, MXN, CLP, CNY, and other currencies in one platform
- Automated FX conversion:Convert at optimal times with transparent rates
- Cross-border settlement:Move funds efficiently across borders
Benefits include:
- Better reconciliation and reporting
- Centralized treasury management
- Improved cash flow visibility with near real-time updates
- These capabilities are particularly critical for SMEs managing multiple suppliers and currencies across China–Latin America trade corridors.
Bank–Fintech Partnerships Are Accelerating Change
Collaboration between regulated banks and fintech platforms is transforming cross-border payment infrastructure:
- Banks contribute:Regulatory compliance, banking licenses, direct access to local payment networks, liquidity management
- Fintechs contribute:Digital platforms, automation, APIs, user experience, global connectivity
Together, they create infrastructure neither could build alone, enabling faster, more transparent, and scalable cross-border payments.
Industry Example: XTransfer and BBVA
At Money20/20 Europe 2026, XTransfer and BBVA signed a Memorandum of Understanding (MOU) to explore integrated cross-border payment infrastructure across Latin America, Europe, and Hong Kong SAR. This partnership exemplifies the trend of bank–fintech collaboration to support SMEs in international trade.
Partnership focus includes:
- Direct FX conversion
- Local collection accounts
- Cross-border payments
- Virtual accounts
- API-based connectivity for enterprise systems
This collaboration targets faster settlement, greater transparency, and reduced operational friction for SMEs. According to XTransfer platform data, collections from Latin America increased 94% year-over-year in 2025, highlighting the growth potential in this corridor.
As Bill Deng, Founder and CEO of XTransfer, noted:
“Latin America remains an active but underserved B2B trade corridor. This partnership with BBVA allows us to simplify cross-border finance and improve efficiency and inclusivity for global traders.”
Ksenia Nekrasova, Global Sector Co-Head of TMT at BBVA, added:
“Digital platforms with integrated, real-time capabilities are transforming how our clients operate internationally. This agreement strengthens our ability to support SMEs expanding globally.
Real-World Scenario: Paying a Chinese Supplier From Latin America
Traditional workflow:
- Collect local currency (BRL)
- Convert to USD
- Initiate SWIFT transfer
- Route through multiple correspondent banks
- Supplier receives funds after 7–10 days
Modern workflow with local currency infrastructure:
- Collect BRL via local rails (PIX)
- Multi-currency wallet holds BRL
- FX conversion to CNY executed with transparent pricing
- Direct supplier settlement in CNY
- Real-time payment visibility for the importer
Benefits:
- Fewer intermediaries and fees
- Faster settlement (same-day or T+1 depending on corridor)
- Improved working capital efficiency
- Simplified treasury operations
What SMEs Should Look For in Modern Payment Infrastructure
- Local currency collection across key markets
- Multi-currency wallet support
- Supplier payment coverage for China and Latin America
- FX transparency and upfront pricing
- Virtual account functionality
- Real-time settlement tracking
- Automated compliance (KYC, AML, trade documentation)
- API integration with enterprise systems
- Bank-backed infrastructure and regulatory compliance
- Scalable solutions that grow with business needs
Conclusion: The Future of Cross-Border Trade Finance
China–Latin America trade is growing rapidly, and payment infrastructure is becoming a strategic advantage. Local collection accounts, multi-currency wallets, virtual accounts, and automated compliance solutions are increasingly core to trade operations.
The XTransfer–BBVA partnership demonstrates how fintech–bank collaboration can modernize payments for SMEs, improving cash flow efficiency, operational speed, and transparency across international trade corridors. As these solutions become more widely adopted, SMEs that optimize their cross-border payment operations will gain measurable competitive advantages in global trade.
Frequently Asked Questions (FAQ)
What is local currency infrastructure?
Payment networks enabling businesses to collect, hold, convert, and transfer funds using local currencies, reducing reliance on USD-based correspondent banking.
Why are virtual accounts important?
They improve reconciliation, tracking, and treasury management without maintaining multiple bank accounts.
Can businesses reduce USD dependency?
Yes, by funding transactions in local currencies while settling with suppliers in other currencies, especially in corridors like China–Latin America.
Why partner with fintechs?
Banks provide regulatory access and network connectivity; fintechs provide technology and automation. Partnerships deliver integrated solutions neither could build alone.
How does payment infrastructure affect trade competitiveness?
Faster settlement, better visibility, and reduced operational complexity enhance cash flow and procurement efficiency.
Sources
1.[SWIFT: Cross-Border Payment Standards](https://www.swift.com/)
2.[SPEI – Electronic Interbank Payment System, Banco de México](https://www.banxico.org.mx/)
- [XTransfer & BBVA MOU Announcement](https://www.prnewswire.co.uk/news-releases/xtransfer-part
- [BBVA Global Payments and Digital Banking](https://www.bbva.com/)
- [PIX – Instant Payment System, Central Bank of Brazil](https://www.bcb.gov.br/)
- [XTransfer Platform Data](https://www.xtransfer.com/knowledge-hub/)
