In the ever-evolving realm of cross-border payments, the integration of fast
payment systems (FPS) has emerged as a promising avenue to enhance the speed,
affordability, accessibility, and transparency of transactions. Against the
backdrop of a global surge in FPS usage and a push towards increased technical
interoperability, the governance and oversight of FPS interlinking have become
pivotal challenges.
G20’s Strategic Priority: Charting the Course for FPS Interlinking
Governance
Recognizing this, the G20 has identified the need to prioritize these
aspects, particularly for FPS, as a key action to meet its 2027 cross-border
payments targets. The Committee on Payments and Market Infrastructures (CPMI),
a body under the Bank for International Settlements, has taken the lead in
addressing the governance complexities surrounding FPS interlinking.
Two-Year Timeline: CPMI’s Journey Towards Governance Solutions
A two-year timeline has been set, with an interim report providing an update
on the CPMI’s engagements thus far. This interim report offers initial
considerations for FPS interlinking governance and oversight, breaking down the
complexities into ten key considerations grouped into three categories.
Foundations of Governance: Strategic Alignment and Shared Objectives
The first two considerations set the stage by emphasizing the importance of
initial structural conditions favoring effective governance. This includes
strategic alignment among involved jurisdictions and a shared understanding of
the objectives and vision for the FPS interlinking arrangement.
Designing for Success: Coherence, Scalability, and Business Viability
Moving deeper, considerations three through six delve into the specific
design priorities for governance, addressing coherence, scalability, business
viability, and inclusiveness of FPS interlinking arrangements. These aspects
are critical for ensuring that the governance structure not only aligns with
strategic goals but also remains adaptable and sustainable in the face of
evolving industry dynamics.
Oversight in a Fast-Paced Landscape: Unique Characteristics of FPS
Considerations seven through ten venture into the unique characteristics of
FPS interlinking arrangements and their implications for oversight. As the
report highlights, the multi-jurisdictional context and intricacies of FPS
require tailored approaches to oversight, taking into account the nuances of
the fast-paced payments landscape.
Preliminary Insights: Balancing Governance and Stakeholder Feedback
While the considerations in the interim report provide valuable insights for
practitioners and authorities, the CPMI stresses their preliminary nature. The
evolving nature of FPS interlinking arrangements necessitates ongoing
engagement with stakeholders to ensure that the final report effectively
addresses the complex challenges involved.
Regulatory Intervention: A Key to Effective Governance?
As the financial services industry continues to grapple with the intricacies
of FPS interlinking, the fundamental question arises: Can effective governance
be achieved without regulatory intervention? The G20’s prioritization of this
action suggests that regulatory guidance and frameworks may play a crucial role
in unlocking the full potential of FPS interlinking, paving the way for a
future of seamless and efficient cross-border payments.
The Journey Ahead: Collaborative Solutions for FPS Interlinking
Crucially, the report concludes with a set of questions, signaling a call
for further stakeholder input. This iterative process aims to refine and expand
the considerations, recognizing that the success of FPS interlinking governance
hinges on diverse perspectives, experiences, and insights.
Accordingly, the ongoing journey involves collaborative efforts, continuous
refinements, and a collective commitment to overcoming the multifaceted
challenges presented by FPS interlinking arrangements. As stakeholders come
together, the promise of seamless cross-border payments becomes not just a goal
but an achievable reality.
In the ever-evolving realm of cross-border payments, the integration of fast
payment systems (FPS) has emerged as a promising avenue to enhance the speed,
affordability, accessibility, and transparency of transactions. Against the
backdrop of a global surge in FPS usage and a push towards increased technical
interoperability, the governance and oversight of FPS interlinking have become
pivotal challenges.
G20’s Strategic Priority: Charting the Course for FPS Interlinking
Governance
Recognizing this, the G20 has identified the need to prioritize these
aspects, particularly for FPS, as a key action to meet its 2027 cross-border
payments targets. The Committee on Payments and Market Infrastructures (CPMI),
a body under the Bank for International Settlements, has taken the lead in
addressing the governance complexities surrounding FPS interlinking.
Two-Year Timeline: CPMI’s Journey Towards Governance Solutions
A two-year timeline has been set, with an interim report providing an update
on the CPMI’s engagements thus far. This interim report offers initial
considerations for FPS interlinking governance and oversight, breaking down the
complexities into ten key considerations grouped into three categories.
Foundations of Governance: Strategic Alignment and Shared Objectives
The first two considerations set the stage by emphasizing the importance of
initial structural conditions favoring effective governance. This includes
strategic alignment among involved jurisdictions and a shared understanding of
the objectives and vision for the FPS interlinking arrangement.
Designing for Success: Coherence, Scalability, and Business Viability
Moving deeper, considerations three through six delve into the specific
design priorities for governance, addressing coherence, scalability, business
viability, and inclusiveness of FPS interlinking arrangements. These aspects
are critical for ensuring that the governance structure not only aligns with
strategic goals but also remains adaptable and sustainable in the face of
evolving industry dynamics.
Oversight in a Fast-Paced Landscape: Unique Characteristics of FPS
Considerations seven through ten venture into the unique characteristics of
FPS interlinking arrangements and their implications for oversight. As the
report highlights, the multi-jurisdictional context and intricacies of FPS
require tailored approaches to oversight, taking into account the nuances of
the fast-paced payments landscape.
Preliminary Insights: Balancing Governance and Stakeholder Feedback
While the considerations in the interim report provide valuable insights for
practitioners and authorities, the CPMI stresses their preliminary nature. The
evolving nature of FPS interlinking arrangements necessitates ongoing
engagement with stakeholders to ensure that the final report effectively
addresses the complex challenges involved.
Regulatory Intervention: A Key to Effective Governance?
As the financial services industry continues to grapple with the intricacies
of FPS interlinking, the fundamental question arises: Can effective governance
be achieved without regulatory intervention? The G20’s prioritization of this
action suggests that regulatory guidance and frameworks may play a crucial role
in unlocking the full potential of FPS interlinking, paving the way for a
future of seamless and efficient cross-border payments.
The Journey Ahead: Collaborative Solutions for FPS Interlinking
Crucially, the report concludes with a set of questions, signaling a call
for further stakeholder input. This iterative process aims to refine and expand
the considerations, recognizing that the success of FPS interlinking governance
hinges on diverse perspectives, experiences, and insights.
Accordingly, the ongoing journey involves collaborative efforts, continuous
refinements, and a collective commitment to overcoming the multifaceted
challenges presented by FPS interlinking arrangements. As stakeholders come
together, the promise of seamless cross-border payments becomes not just a goal
but an achievable reality.
