The Border Is Also an Access Rule
Cross-border payments depend not only on when a system is open, but on who is allowed to use it and on whose behalf. The focus here is participant access: the difference between direct and indirect participation, the risks and benefits of widening the gate, and what the Federal Reserve’s FedNow proposal actually changes. That distinction helps readers judge whether an intermediary is removing a bottleneck, adding a new dependency, or doing both at once.
A payment rail can be available in a technical sense while remaining unavailable to a particular bank, non-bank payment service provider or foreign institution. The reason may be a legal eligibility rule, a requirement to hold a settlement account, a funding condition, or a decision by the system operator about which participants it will serve. Access is therefore part of the payment path. If the provider that a customer wants to use cannot enter directly, the payment must travel through an institution that can.
Three ways to reach a payment system
The simplest distinction is between direct and indirect access. Direct access allows an entity to clear and settle payments independently, typically through its own relationship with the central bank or settlement system. Indirect access means that a direct participant performs some combination of payment initiation, clearing or settlement on behalf of another entity. A third arrangement can provide direct technical access to the system while leaving settlement to another participant. The second entity can send its own instructions through the interface, but it does not settle them from its own account.
These categories describe responsibilities, not just cables or login credentials. A provider with direct access may control more of its payment process and rely less on another institution’s operating decisions, pricing and liquidity. An indirectly participating provider depends on the direct participant both operationally and commercially. If the intermediary is closed, lacks liquidity, changes its risk appetite or cannot support a particular transaction, the indirectly connected provider may be unable to deliver the same service even when the underlying payment system is open.
That dependence can lengthen a transaction chain. Every additional participant may have to receive an instruction, apply its own controls, translate information, manage a funding position and pass the result onward. The point is not that every intermediary adds the same amount of delay or cost. An intermediary can provide valuable reach and specialist capability. The point is that the end-to-end result depends on the intermediary’s availability and incentives as well as on the rail’s performance.
The 2025 CPMI survey shows why access remains a significant boundary for cross-border payments. Direct access for authorised non-bank PSPs was reported by 45% of FPS and 39% of RTGS systems. Foreign banks with a local presence had direct access to 79% of FPS and 74% of RTGS systems. Foreign banks without a local presence had direct access to only 19% of both types of system. The figures describe system policies, not the share of payment volume, but they reveal a structural distinction: having a presence inside a jurisdiction often makes access easier than serving the jurisdiction from abroad.
The result is a two-sided design choice. Restricting access can make eligibility and supervision more straightforward, and can limit the number of institutions that an operator must monitor. But it can also leave non-bank providers and foreign institutions dependent on local banks, creating longer chains and weaker competitive pressure. Wider access can bring more providers, more choice and potentially lower funding dependence. It can also expose existing operational and counterparty risks to a broader set of participants.
“Wider” does not mean “uncontrolled.” The survey identifies eligibility restrictions, funding requirements, staffing needs and infrastructure investment as barriers to direct access. A system operator may require a provider to demonstrate operational capability, pre-fund its account or observe limits on balances. In the examples described by the BIS brief, the Bank of England allows certain non-bank PSPs to settle with their own or client funds under safeguards, including prefunding and usage-based caps, while credit facilities are not available to them. The European Central Bank’s T2 access for certain non-bank PSPs similarly separates central-bank settlement funds from safeguarded customer funds and does not extend credit facilities to those PSPs.
These arrangements show that access and safety are coupled. A non-bank may receive a path into a central settlement system while still facing limits on balances and credit. Those limits can reduce the risk that an institution’s failure or liquidity shortfall disrupts the system, but they also shape how much business the participant can handle and when. Access can improve competition without making every provider operationally equivalent to a bank.
The same principle applies to foreign banks. A branch with a local presence may satisfy local legal and operational expectations and therefore qualify for direct participation. A foreign bank without that presence may instead need a local direct participant. This can be sensible from a supervisory perspective, but it leaves the cross-border payment dependent on the commercial and operational relationship between the two institutions. The survey reports that few systems planned to expand direct access for foreign banks without a local presence, so this boundary is not disappearing simply because domestic payment technology is improving.
The useful question is not “How many intermediaries are there?” as a universal score. It is “Which responsibility does each participant own?” One intermediary might provide access to a payment system; another might provide settlement liquidity; a third might carry the international portion. A short chain can still fail if one participant owns an indispensable control. A longer chain can be reliable if its responsibilities, funding and oversight are clear. Access changes the topology of the payment, but topology must be understood alongside ownership and risk.
What the FedNow proposal changes—and what it leaves outside
The Federal Reserve’s April 8, 2026 press release offers a focused example of this access problem. The Federal Reserve Board invited public comment on a proposal that would allow U.S. banks and credit unions to use intermediaries to transfer funds through the FedNow Service. The release gives a cross-border use case: a U.S. bank could use FedNow to transact with a correspondent bank that facilitates the international portion of a cross-border payment.
The proposal matters because the current participant path is narrow. The release says that a transfer sent through FedNow can currently include only two U.S. banks. That description places a boundary around the domestic instant-payment service. A bank can use the rail for a transfer between the U.S. participants permitted by the current arrangement, but a cross-border transaction may need another institution to handle the international part. The proposed flexibility would make an intermediary-mediated path possible within the FedNow context.
This is not the same as saying that FedNow would become a global cross-border network. The press release does not state that foreign banks would receive direct participation, that foreign-currency settlement would occur through FedNow, or that the proposal would harmonise message formats and legal rules across jurisdictions. It describes a way for a U.S. bank to transact with a correspondent bank that facilitates the international portion. The proposal therefore changes the participant structure around a domestic leg; it does not, on the evidence in the release, settle every question about the international leg.
That distinction is easy to lose because the word “intermediary” can sound like a defect. In practice, an intermediary can be the mechanism that connects two otherwise separate systems. The release identifies the correspondent bank as the institution that facilitates the international portion, but it does not specify the accounts, compliance capabilities or market access involved. Allowing a domestic bank to reach that institution through the FedNow service could support a use case that the two-U.S.-bank path cannot express.
At the same time, the intermediary becomes part of the service’s reliability and cost profile. The institution must be available when the payment arrives, able to process the information, willing to support the transaction and subject to the relevant controls. Its operating hours may not match the domestic rail. Its commercial terms may affect the price. Its role may depend on rules that are outside FedNow itself. The proposal can create a more flexible path without making the path independent of the intermediary.
The proposal’s procedural status also matters. The release invited public comment, with comments due within 60 days after publication in the Federal Register. It is therefore evidence of a proposed policy change, not of a final rule or a measured improvement in cross-border speed. A careful description should say what flexibility is being considered and why it could support new private-sector use cases. It should not convert the announcement into a claim that customers already receive faster international transfers.
The two parts of the diagram belong together. The generic access paths show why a provider may need a direct participant. The FedNow paths show a specific proposed use of that participant relationship. The domestic rail remains fast in both cases; what changes is the allowed route and the institution responsible for carrying the payment beyond the domestic boundary.
Access is a trade-off between reach and control
A useful way to assess an access reform is to ask four questions. First, which entities become eligible: banks, authorised non-bank PSPs, foreign banks with a local presence, or foreign banks without one? Second, which responsibilities become direct: initiation, clearing, settlement, or only technical instruction? Third, what safeguards accompany access: prefunding, balance caps, eligibility tests, monitoring or limits on credit? Fourth, which institution remains accountable when a payment fails or cannot be completed?
These questions prevent a common category error. More participants do not automatically mean more cross-border interoperability. Access can remove one barrier while leaving the connection between jurisdictions absent. Conversely, a system may support a cross-border link while restricting direct foreign participation and relying on domestic intermediaries. The right judgment depends on which bottleneck the reform targets.
The FedNow example targets a participant-structure bottleneck around a U.S. domestic rail. It may make a correspondent relationship usable for a described international use case, subject to the proposal’s final form and the arrangements of the institutions involved. It does not by itself establish that the foreign side is open, that the relevant settlement windows overlap, or that the payment information and legal permissions align. Those are separate conditions in the same end-to-end chain.
The broader lesson is that an intermediary is neither automatically the problem nor automatically the solution. It is a component with a job, a dependency and a risk boundary. Direct access may shorten a chain or reduce reliance on another participant, but it brings eligibility, liquidity, operational and supervisory responsibilities. Indirect access may preserve control and extend reach, but it leaves the service dependent on the intermediary’s decisions and capacity.
Once timing and access are considered together, an apparently instant payment can be diagnosed more precisely. It may be waiting because the next settlement system is closed, because the necessary participant is not eligible, or because the payment requires an intermediary that has not accepted the path. The next step is to combine those conditions and test what “complete” means before examining how two domestic fast-payment systems are actually linked across a border.