Acta non verba: interlinking fast payment systems to enhance cross-border payments
Highlights
- The G7 supports responsible innovation that enables interoperability among new and existing cross-border payment systems; a level playing field for private sector competition and innovation; and the observance of relevant international standards.
- Emerging markets and developing economies have made considerable progress in fast payment adoption, laying the foundation for interlinking at the regional and international levels – thus enhancing cross-border payments.
- The CPMI is committed to delivering on its roadmap actions, focusing on those that support end users that are most disproportionately affected by inefficient cross-border payments and redoubling its efforts to promote implementation at the jurisdictional level.
Introduction
Safe and efficient cross-border payments can offer benefits to all, through lower costs, faster speed, greater transparency and improved access. These enhancements could be especially beneficial for emerging markets and developing economies (EMDEs), for example, through improved international remittance services or in reducing frictions to further encourage regional trade. In 2023, the G20 endorsed a prioritised cross-border payments roadmap, building on the foundations laid by the public sector through analyses, stocktakes and guidance in the first years of the programme. As part of the prioritised roadmap, three priority themes have been put forward: payment system interoperability and extension; data exchange and message standards; and legal, regulatory and supervisory frameworks.
Improving cross-border payments and reducing the risk of fragmentation through greater integration of payment infrastructures was identified as a key priority of the Italian G7 Presidency in 2024. G7 members discussed and welcomed initiatives to take forward the G20 roadmap and have reaffirmed their support for international cooperation within the G7 and beyond, in particular with EMDEs. The support from jurisdictions beyond the G20 is a critical success factor in enhancing cross-border payments for all, particularly those that depend on remittances from family and friends. Improving cross-border payments should contribute to financial integration and counter the risk of market fragmentation. The G7 supports responsible innovation that enables interoperability among new and existing cross-border payment systems, a level playing field for private sector competition and innovation, and the observance of relevant international standards. As such, the G7 has emphasised that such solutions should embed values that are widely shared across the international monetary and financial system, including appropriate transparency, the rule of law and sound economic governance.
Among those solutions, payment system interlinking arrangements may deliver significant improvements in a relatively short time. Interlinking arrangements allow banks and other payment service providers of different jurisdictions to transact safely and efficiently with each other, without requiring them to participate in the same payment system, and they can reduce the need to use intermediaries (eg correspondent banks). Such arrangements can shorten transaction chains, reduce overall costs and increase the transparency and speed of payments.
