The UK is undergoing a consolidation of key retail payment systems under a single New Payments Architecture (NPA), aimed at addressing the lack of a common entry point for access and different on-boarding processes for participants across the different systems. Similarly, Australia launched the New Payment Platform earlier this year, which is seen as a key payments infrastructure for the domestic market. Of significance, these developments share common outcomes – to avoid duplication of industry resources, widen network reach and enable economies of scale. Here in Malaysia, pooling of resources at the infrastructure level has been a longstanding strategy for the payment system. As early as 1997, Malaysia had consolidated its three ATM networks to eliminate fragmentation in that segment. More recently, we saw the formation of PayNet which serves as a shared payment infrastructure to facilitate domestic payments. Of note, PayNet will be launching the Real-time Retail Payments Platform (RPP) next week. This will be supported by a National Addressing Database (NAD) that enables users to pay seamlessly and securely using simple identifiers such as their mobile phone, national registration 4/6  BIS central bankers' speeches  or business registration numbers. At the international level, regulators should also seek to collaborate towards promoting greater harmonisation or centralisation of legal, technical and operational arrangements for payments. These include exploring the adoption of international standards such as the ISO 20022 messaging standard. These standards would enhance compatibility across different infrastructures and pave the way towards greater cross-border interoperability.

If not managed well, cross-border differences may hamper efforts to support bilateral or regional integration, such as where local payment companies look to expand or integrate to enable crossborder connectivity. Shifting market expectations is the third key challenge, which can lead to a gap between customer demand and payment services available. Consumers today are increasingly used to on-demand services that are instant and seamless. To this end, retail payments are making good progress – increasingly, more countries have developed real-time payment infrastructure that support instant peer-to-peer (P2P) payments. However, the same experience is increasingly expected – but not necessarily delivered – for other segments, such as in consumer-to-business (C2B) and business-to-business (B2B) payments. Gaps also remain on the cross-border front in terms of speed, transparency and cost. The growing complexity and depth of global financial markets, such as in securities and derivatives markets, also has implications on large value payment systems. Financial institutions and large corporates are gradually facing more difficulties in handling multiple types of financial instruments across multiple jurisdictions and across multiple functions within their organisations. Perhaps there may be demand going forward for payment systems to support greater sophistication in user functionality, such as liquidity optimisation facilities for banks and automated treasury services for corporate clients. Keeping in mind these challenges, a few questions come to mind. First, what is the appropriate role for regulators when it comes to digital innovation in payments?