Cross-border payments sit at the heart of international trade and economic activity. However, for too long cross-border payments have faced four particular challenges: high costs, low speed, limited access and insufficient transparency. Faster, cheaper, more transparent and inclusive cross-border payments would have widespread benefits for supporting economic growth, international trade, global development and financial inclusion. Given the cross-border nature of these issues, coordinated international action will be central to addressing these issues, and we will also need close collaboration with the private sector.
The FSB has been leading work to assess and address the decline in correspondent banking and remittance payments since 2015. More recently, at the request of the G20, the FSB has developed a roadmap to enhance cross-border payments.
G20 cross-border payments roadmap
The roadmap provides a high-level plan, which sets ambitious but achievable goals. It is designed to provide the flexibility to accommodate the differing starting points for payment system arrangements in countries and regions around the world and to be adaptable year by year in how the goals are met.
The roadmap deals with deep-seated, long-standing issues. It aims to achieve practical improvements in the shorter term while acknowledging that other initiatives will need to be implemented over longer time periods. For 2021, it includes a set of committed actions and timetables, to achieve early results in improving existing arrangements, and beyond that point indicative milestones that allow adjustments to the way forward as the work responds to what is a constantly innovating market. One of the first tasks will be to agree overall quantitative targets for the improvements to payments, in terms in terms of factors such as speed and cost, in order to ensure a clear sense of overall direction.
The roadmap will bring together a coalition of international and national actors to deliver on its five focus areas.
First, a commitment to a joint public and private sector vision to enhance cross-border payments.
Second, steps to coordinate regulatory, supervisory and oversight frameworks.
Third, improvements in existing payment infrastructures so they can support the requirements of the cross-border payments market.
Fourth, increased data quality and straight-through processing by enhancing data and market practices.
And fifth, more exploratory work to examine the potential role of new types of payment infrastructures and arrangements.
The involvement of the private sector, sharing their insights and practical expertise, as well as delivering change, will be key to support the practical implementation of the roadmap across the various projects. Public consultation will take place at the appropriate points, in order to ensure transparency and accountability.