Financial calculations in foreign economic activity: why the old rules no longer work and what replaced them

Any entrepreneur working with foreign partners today knows this unpleasant feeling. You send a payment, a week passes, and the money has not reached the recipient. Your bank throws up its hands: "delayed by the correspondent bank." The partner is nervous, the goods are not shipped, and the business incurs losses.

This is not an isolated failure. This is a systemic paralysis of the old financial infrastructure. The familiar world, where all international foreign trade settlements were conducted through the dollar as a universal means and SWIFT as a single communication channel, collapsed. 

The sanctions packages, the blocking of accounts, the sudden refusals of Western banks to conduct any operations, even indirectly related to Russia — all these are not temporary obstacles. This is a tectonic shift that has forced businesses to urgently look for completely new ways to move money.

The problem is compounded by a whole range of factors: This includes the direct refusal of Western banks to make payments for goods of Russian origin, a sharp increase in fees for each transaction, and unpredictable currency risks during conversion. Add here the ban on access to commodity exchanges and the capital market, and it becomes obvious that the old system is not just "floundering," but purposefully pushing Russian business out of itself.

The illusion of a "return to normality" and the birth of a "payment menu"

At first, inertia reigned in the market. Many companies lived in the hope that "everything would return to normal soon" and it would be possible to work in the old way. But this illusion quickly dissipated. As Alexey Yakovlev, director of the Financial Policy Department of the Ministry of Finance, noted, when it finally became clear that the previous channels would not be restored, the market switched from waiting to action.

One broken "highway" has been replaced by many flexible and diverse "workarounds". There is what can be called a "payment menu" — a set of alternative tools that can be combined depending on the situation. 

This is the new strategy.:  settlements in national currencies (yuan, rupees, dirhams), the revival of complex barter transactions, the use of payment agents in friendly jurisdictions. The main idea is that not all of these tools need to be used at the same time. But they must be at hand so that if one channel is blocked, you can instantly switch to another. This is no longer "patching holes", but a long-term strategy that works ahead of time.

Why there won't be a "magic pill": failed ideas and new realities

In times of crisis, it is always tempting to find one simple solution that will replace the old system. But practice has shown that such "magic pills" for cross-border payments simply do not exist.

· Idea #1: Replace the dollar with the yuan or gold. It seems like a logical solution. But, as experts rightly point out, this is simply replacing one monopoly with another. The entire system will again be dependent on one asset or one currency, which does not solve the vulnerability problem.

· Idea #2: Build your global SWIFT counterpart. Ambitious, but, according to market participants, utopian. Creating such a complex and secure system is a decades—long project that requires the consent of dozens of countries. In addition, there is no guarantee that such a megaproject will not become a target for the same sanctions and cyber attacks.

· Idea #3: Massive transition to cryptocurrencies. The technology is definitely on a wave of popularity. But it is not yet ready for serious, legal international settlements of foreign economic activity. Legal uncertainty, enormous volatility and security issues do not allow us to consider the crypt as a full-fledged replacement for traditional banking instruments.

· Idea #4: Use central bank digital currencies (CBDCs). Not to be confused with cryptocurrencies. We are talking about the digital ruble, the digital yuan and other government projects. Theoretically, they are ideally suited for direct payments, bypassing correspondent networks. But in practice, the technology is still at the testing stage. There are no uniform international standards or a clear legal framework for their cross-border use. This is certainly the technology of the future, but definitely not the solution to today's problems.

The conclusion from this is simple: there will be no single alternative to SWIFT for everyone at once. The future lies in the multitude of two- and three-way payment systems that will be created for specific trade corridors and mutual interests of partner countries.

The new financial architecture is being built in real time. Which banks are opening new correspondent accounts, which alternatives to SWIFT have really worked, and which have turned out to be dead ends, which currencies have become toxic — we track and analyze all this operational information that is critically important for conducting cross-border payments in our Telegram channel.

Author: Inna Zaporozhtseva, expert in financial and operational compliance and business systematization