Victoria Cleland: Global action to enhance cross-border payments
Speech (virtual) by Ms Victoria Cleland, Executive Director for Banking, Payments and
Innovation of the Bank of England, at the Silk Road Cash & Payments conference,
Almaty, 29 March 2023.
* * *
Cross-border payments are crucial to the smooth functioning of the global economy,
and their importance is growing in our ever more interconnected, global digital
economy. The value of cross-border payments is forecast to increase from almost $150
1
trillion in 2017 to over $250 trillion by 2027 . Yet cross-border payments are typically,
though I want to stress not always, slower, more costly, less transparent, and harder to
access than domestic payments. And this impacts not just big wholesale players but
consumer and remittance payments too. There are instances of payments taking up to
2 3
10 days and costing more than 10% of the payment value, and all too often with
timing and cost unknown upfront.
The G20 made enhancing cross-border payments a priority in 2020 and developed a
roadmapOpens in a new window for delivering improvements. Since then, organisations
from around the world have come together and made significant strides to lay the
foundations for enhancing cross-border payments. As set out in the Financial Stability
Board's (FSB) latest progress reportOpens in a new window in October 2022, much
progress has already been made including: agreeing global quantitative targetsOpens
in a new window and a methodology for measuring progress towards them, undertaking
stocktakes and analyses of existing payment systems and arrangements, and
publishing proposals and best practice for achieving progress. And there have already
been tangible changes, for example the move by SWIFT and some key systems to ISO
20022Opens in a new window messaging standards, increased operating hours and the
launch of interlinking arrangements such as between Thailand's PromptPay and
Singapore's PayNow.
Now the work is at an inflection point: many of the original roadmap actions have been
completed, providing a solid foundation from which to make real changes to the
crossborder payments experience. In February 2023 the FSB published a set of priority
actions that will be taken forward to meet the cross-border payments targets by 2027.
The actions are grouped in three priority focus areasOpens in a new window :
Payment system interoperability and extension;
Legal, regulatory and supervisory frameworks; and
Cross-border data exchange and message standards.
We need to work together to make payments faster, cheaper, more accessible, and
more transparent. Some of this work needs to continue to be international for example,
agreeing approaches to harmonising rules and standards. But it needs to be
complemented by action from the public and private sectors in individual jurisdictions to
determine where progress is needed and how to best implement it through a range of
projects and changes, in time to meet the 2027 targets.
I encourage central banks, payment system operators, providers, participants, and
users from all countries - including all those at the conference today and extending well
beyond the G20 - to work together to enhance cross-border payments. We can
continue learning from each other and refining our approaches via international forums
led by the FSB and Committee on Payments and Market Infrastructures (CPMI) - such
as the annual Payment Summit with senior industry representatives, the new Industry
4 5
Taskforces , working jointly with the IMF and World Bank on identifying appropriate
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technical assistance, and the new Central Banks' Community of Practice .
At the Bank of England, we are already making tangible progress towards enhancing
cross-border payments. We are currently undertaking a transformational RTGS
Renewal Programme to deliver a range of new features and capabilities for payments.
This will include several features highlighted in the priority focus areas - such as the
adoption of ISO20022 this summer, reducing barriers to access RTGS, and enhancing
user functionality such as Application Programme Interfaces (APIs). As recommended
in the May 2022 CPMI reportOpens in a new window , we will also be working with the
private sector to consider the case for an extension of RTGS operating hours, which
could help to reduce delays in cross-border payments as well as settlement risks and
liquidity costs. And we have already consulted industry on what more we can do,
including discussions on demand for synchronised settlement which could link RTGS
ledgers in different countries, in our Roadmap Beyond 2024 .
Enhancing cross-border payments can deliver enormous benefits to business and
consumers. We all have a role to play in making this a reality.
I would like to thank Abigail Daniel and the Cross Border Team for their help in
preparing these remarks.
1
FT Op-Ed by Jon Cunliffe, (2020). "Cross-border payment systems have been
neglected for too long"Opens in a new window
2
SWIFT gpi (2023)
3
The World Bank Group (2021), 'Remittance Prices Worldwide QuarterlyOpens in a
new window '
4
Financial Stability Board (2023), 'FSB invites senior representatives from firms and
industry associations to join cross-border payment taskforceOpens in a new window '
5
Bank for International Settlements: Committee on Payments and Market Infrastructure
(2023), 'Bank for International Settlements' Committee on Payments and Market
Infrastructures invites market stakeholders to join cross-border payments
interoperability and extension task force'Opens in a new window
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These forums are detailed in the FSB's priority actionsOpens in a new window paper
(table 4).