A path towards enhancing cross-border payments: Breaking down the realities

If the future of payments, as envisaged by the Financial Stability Board, is to be delivered, it will require industry and regulatory investment. Improvements will be incremental and slow in adoption unless a number of significant challenges outside pure technical capabilities are addressed. These challenges are a result of diverse national legal and regulatory regimes; varying standards and practices in financial messaging; the different channels for reaching end users; the difficulty of interlinking multiple retail payment systems; data management and storage constraints; supplier and network oversight; and, not insignificantly, clarity on the business case for change, when revenue for payments is on the wane. This paper evaluates the importance and implications of managing these challenges in a way that does not increase the levels of risk in payment processes and, most importantly, does not impede the ability of the authorities to manage financial stability. It proposes the selection of a few key corridors with high volumes of worker remittances and the development of path-finding market practices as a prelude to agreed global standards. Finally, the paper concludes with a few ideas on what cross-border payments could look like by 2030.