Streamlining anti-money laundering checks, longer central bank opening hours and linking national systems would cut cross-border payment costs, global regulators said on Monday.
FILE PHOTO: A small toy figure is seen on representations of the virtual currency on a displayed European Union flag and the Facebook Libra logo in this illustration picture, October 20, 2019. REUTERS/Dado Ruvic/IllustrationPayments have come under the spotlight since Facebook (FB.O) proposed its Libra digital stablecoin, prompting central banks to think about launching their own digital currency.
A report by the Committee on Payments and Market Infrastructures said cross border payments are set to increase from $20 trillion in 2019 to $30 trillion by 2030.
“The cost and hassle of making payments cross border discourages businesses, particularly small businesses, from entering the global market place,” CPMI Chair Jon Cunliffe said.
For a graphic on CPMI Payments:
But it can take 10 days for a cross-border payment to be completed and cost up to 10 times as much as a domestic one.
“It’s no surprise that people turning to alternatives that may look attractive but are potentially less secure,” Cunliffe, who is also Deputy Governor of the Bank of England, added.
The CPMI set out 19 “building blocks” that will take 5 years or more to put into place in the second of a three-stage process on barriers to cheaper and faster cross-border payments,
Global regulators are due to set out later in the year for Group of 20 Economies (G20) which authorities will be responsible for implementing the steps.
Opening central bank payment infrastructure for longer would speed up payments that involve swapping two currencies to complete, the CPMI report said, adding that a centralised cross-border utility of the “know your customer” (KYC) data needed for anti-money laundering checks would also streamline payments.
“In some jurisdictions, the political resistance could be considerable insofar as it involves ceding authority to multinational standard setters on KYC arrangements and allowing citizens’ personal information to be accessed cross-border.”
While new technology attracts the attention, there is room for substantial improvement in existing systems, Cunliffe said.