On 13 October 2020, the Financial Stability Board (FSB) published a report to enhance cross-border payments. The report was delivered to G20 Finance Ministers and Central Bank Governors for their meeting on 14 October 2020.
The G20 has made enhancing cross-border payments a priority during the Saudi Arabian Presidency, and asked the FSB to coordinate the development of a roadmap for this purpose, through a three-stage process.
The report now published has been developed by the FSB, in coordination with the Committee on Payments and Market Infrastructures (CPMI) and other relevant international organisations and standard setting bodies. It builds on the FSB’s stage 1 report, setting out the challenges and the frictions in cross-border payments that contribute to them, and the CPMI’s stage 2 report, describing the necessary elements of a response, in the form of a set of 19 building blocks.
The report now published, as stage 3 of the process, sets out for G20 endorsement the roadmap itself, as a comprehensive plan for addressing the identified challenges, including practical steps and indicative timeframes needed to do so and paves the way for implementation.
The roadmap follows the structure of the stage 2 report, setting out actions and indicative timelines in the following five focus areas:
- Committing to a joint public and private sector vision to enhance cross-border payments.
- Coordinating on regulatory, supervisory and oversight frameworks.
- Improving existing payment infrastructures and arrangements to support the requirements of the cross-border payments market.
- Increasing data quality and straight-through processing by enhancing data and market practices.
- Exploring the potential role of new payment infrastructures and arrangements.
The first four focus areas seek to enhance the existing payments ecosystem. The fifth is more exploratory and covers emerging payment infrastructures and arrangements. While each of the building blocks in the first four focus areas individually has the ability to bring notable benefits to cross-border payments, they have many interdependencies and the most significant enhancements are likely to be achieved if they are all implemented in a coordinated manner. The potential for new payment infrastructures and arrangements will also depend on the first four focus areas delivering change.