The Committee on Payments and Market Infrastructures (CPMI) has published a report on cross-border retail payments. The report aims to present a holistic view of cross-border retail payments, covering the various cross-border retail payment types and the processes behind clearing and settlement of cross-border retail payments.
For the purposes of the report, cross-border retail payments are defined as funds transfers of relatively low value and urgency where the parties to the payment are end users and the payer and payee are located in different (national) jurisdictions. Typically, cross-border retail payments are remote payments and involve the national payment systems of at least two jurisdictions, different currencies and specialised processes (including the execution and settlement of foreign exchange transactions).
The report presents a number of key findings:
- on the demand side, there is increasing commonality across end user types in the desire for cross-border retail payments to be more aligned with purely domestic payments in terms of their speed, convenience, transparency and cost; and
- on the supply side, substantial innovation is occurring but is often focussed on certain parts of the supply process or is relatively nascent with effects that have not yet materialised. In particular, the front end of the cross-border retail payments market, involving the instruments and access channels available to end users as well as the entities providing them with services, has exhibited substantial innovation, much of it relatively mature. In contrast, innovations at the back end of the market, reflecting the service providers, processes and arrangements that effect the transfer of value and the exchange of currencies across borders, are generally less extensive and mature such that their long-run significance and impact are unclear.
- The report concludes that more diversity of back-end clearing and settlement arrangements could result in cross-border retail payments that are quicker, cheaper and more transparent. Such diversity could include an improved traditional correspondent banking systems, greater interoperability between domestic payment infrastructures and greater interoperability between closed-loop proprietary systems.
View CPMI cross—border retail payments, 16 February 2018