INF/MSME/R/14  
 
29 June 2020  
(20-4500) Page: 1/2 
 Original: English  
 
INFORMAL WORKING GRO UP ON MSMES  
17 JUNE 2020 WEBINAR ON MSMES AND CROSS -BORDER PAYMENT  SERVICES  
Summary of discussions  
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Cross -border payment services are a key tool  for MSMEs  to participate in international trade and 
global value chains. Studies have found that MSMEs with cross -border digital payments have a much 
higher first year survival rate compared with MSMEs that do not. However, regulatory complexity 
and limited interna tional commitments create a difficult environment both for small firms to access 
and offer digital financial services.  
 
Speakers highlighted a number of n eeds for cross border payment services. First there is a need to 
enhance cyber security  as a foundatio n for MSME participation . Second, there is a need to re -visit 
and increase services commitments under GATS as currently only a quarter of Members have fully 
liberalized cross border payments.  Finally, there is a need to homogenize regulation  thereby reduci ng 
regulatory complexity and increas ing framework interoperability . 
 
1. Crispin Conroy  from the ICC presented the enormous potential digital payments hold for 
MSMEs. As e -commerce spiked in  the first quarter of 2020 with COVID -19, digital payments grew 
by 15 % both domestically and internationally.  Electronic payment services can provide a number 
of benefits for small firms including credit histories, which can facilitate access to finance; the ability 
to accept global payments , which could expand market reach; and finally access to value chains, by 
expediting B2B transactions. However, electronic payments are only possible if consumers 
understand the use of these payment systems and businesses are capable of accepting them. Crispin 
Conroy underscored the need for clean, international commitments on digital payments and noted 
the e-commerce JSI discussion concerning  reschedul ing these  commitments under the GATS . Given 
that many Members still impose limitations and conditions on f oreign digital payment transactions 
and services, there is a need to re -examine this area , a position the ICC details in a recent 
issues  brief. 
2. Evgen Sopin, CEO of Commercegate  presented the key challenges  FinTech  small payment 
processors, such as Commercegate, face in providing payment services to merchants . FinTech 
SME providers  in particular find it challenging to locate  large banks to finance  them and then have 
difficulty accessing global payment systems (such as S WIFT or SEPA). However, these same small 
financial firms are the ones that are more willing to provide SMEs with the services they need for 
international transactions given  the risk and return is not valuable enough for large banks to 
consider. Digitalized payments can also benefit SMEs by allowing them access to better technologies 
and shared market platforms , as well as better foreign exchange rates and cash management 
processes.  He outlined four ideas that policymakers should consider to facilitate MSME cross -border 
payments. These included 1) improve the relationship between fintech startups and large banks  
through supports and guarantees; 2) reduce the risk of non -compliance by cl arifying regulatory 
frameworks and direct communication; 3) reduce cyber security risks by defining rules for 
information exchange and secure tool for digital reporting; and 4) increase international cooperation 
by aligning regulatory requirements and buil ding an international database to register fraudulent 
activities. Ultimately, Evgen Sopin underscored the need for cybersecurity, especially by 
intermediaries, and stressed the need for unification and alignment of requirements.  INF/MSME/R/14  
 
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  3. Mike Gallaher, digital trad e fellow a t the WEF, presented key findings from an insight report 
titled Connecting Digital Economies: Policy Recommendations for  Cross -Border Payments . He b egan 
with the benefits small businesses gain by accepting digital payments, including financial inclusion, 
new opportunities, and more resilience (MSMEs  that accept cross -border digital payments have a 
97% one -year survival rate compared to 43% for all MSMEs in their first year). However, he further 
noted various challenges that limit  the supply of  cross-border payments, including complexity of 
standards,  uncoordinated regulations, market access barriers, and cybersecurity vulnerabilities. 
Mike Gallager emphasized that the adoption of international standards for digital payments, such as 
those from the ISO and BIS, are critical to further payment integrati on.  
4. Juan Marchetti from the WTO Trade in Services  and Investment  Division  made three main 
points. First , that cross border payments are critical for SMEs to integrate in to the global economy ; 
second , that barriers and fees inhibit choice and efficiency , such as by delaying payment receipts 
and creating additional expenses ; and third , there is a need for action in this field. Juan Marchetti 
emphasized that the WTO has been unexploited as a forum to negotiate away barriers that affect 
cross border digital pa yments, noting that only about one quarter of Members have fully liberalized 
cross border payments and money transmission . He advised that Members should look to reduc ing 
overly burdensome regulatory requirements and encourage enabling frameworks to boost global 
e-commerce and financial inclusion.  
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