Bank for International Settlements (BIS) has published a concept paper highlighting the scenario of Interoperability between payment systems across borders. Paper highlights that element of Interoperability between various cross border payment systems will improve the payment process. Cross border transactions can be seamlessly conducted by end users without any interruption and it can be achieved by advancement in technology, semantic and compatibility of business system. Concept paper is authored by Stijn Claessens, Codruta Boar,  Anneke Kosse, Ross Leckow and Tara Rice.

Central banks are working hard to innovate and improve cross-border payments mechanism. Cross border payment is also a key priority of G20, aiming to make the payments safer as well as cheaper, transparent and accessible to everyone.

This can be achieved with the support of both the public as well as private sectors, which needs to make advancement in terms of necessary technology and infrastructure and also for promoting required policy and regulatory frameworks. The G20 cross-border payments program is a multiyear initiative and have multi-faceted nature and aspects embedded to it.

The criticality of the initiative makes it imperative to have greater interoperability in the cross-border payment system at regional as well as global level. Deeper coordination and collaboration is required for making existing and new payment infrastructures interoperable.

Various G20 programmes are focussing on harmonisation, standardisation and developing as well as applying common features to the payment systems. In parallel to the G20 initiative, the innovative projects at BIS have shown that innovation have potential to speed progress among central banks and other participants. The changes in the cross-border payment system will fundamentally impacts and change the way we live and transact today and can be achieved by support of private and public sectors in a coordinated and sustained fashion.

It is being envisaged that both wholesale and retail Cross-border payments must become more faster, transparent, cheaper as well as accessible, whilst maintaining safety and security. This vision can only be achieved by developing interoperability between payment systems across borders. G20 & BIS are serious on improving the cross-border payment system as stakes are high & failure to achieve these goals can risk the fragmentation of the global financial system.

Bureau Galactik Views