Four challenges with current cross-border payments

High costs Low speed

Limited access Insufficient transparency

Cross-border Payments - A global roadmap for improvements

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3Source: CPMI 2020: “Enhancing cross-border payments: building blocks of a global roadmap”, Stage 2 report to the G20, July.

5 focus areas, 19 building blocks

Cross-border Payments - A global roadmap for improvements

A key step in 2021:Developing targets to ensure commitment and accountability (Building Block 1)

• Quantitative targets directly related to the four challengeso public consultation launched in May 2021*; submission to the G20 Leaders in October 2021

• Yearly reports from 2022 onwards on progress against the key performance indicators (KPIs) agreed for targets

• Proposed Targets are simple, high-level, small in number and focused on the experience of end-users• Targets set at the global level, not national

• Targets proposed across three market segments :

Cross-border Payments - A global roadmap for improvements

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Wholesale Retail (e.g. B2B, P2B/B2P, other P2P)

Remittances

*FSB 2021: “Targets for Addressing the Four Challenges of Cross-Border Payments: Consultative document”, May.

Remittance market segment definitionCross-border Payments - A global roadmap for improvements

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• Low-value/ high volume transfers of money between individuals typically to family members/ friends abroad, recurring and non-recurring

• Major service providers: international money transfer operators, commercial banks, post offices, mobile money operators

• ‘Other P2P’ have been split from remittances and included under retail to reflect different priorities end-users have and greater challenges faced by remittances in certain country corridors

• Consultation Q4: Do you agree with the proposal in the definition of the market segments to separate remittance payments from other types of cross-border person-to-person (P2P) payments because of the greater challenges that remittances in some country corridors face? If so, can you suggest data sources that can distinguish between the two types?

Proposed targets for remittances

• Costs (by 2030):o UN Sustainable Development Goal re-affirmedo Global average cost of sending $200 no more than 3%, no corridors with costs higher than 5%

• Speed (by end-2027):o Large majority (e.g. 75%) of remittance payments in every corridor to provide availability of funds for

recipient within one hour of payment initiationo Remainder of the market – within one business day

• Access (by end-2027):o More than 90% of individuals who wish to send or receive a remittance payment to have the means to

do so electronically

• Transparency (by end-2027):o All payment service providers to provide at a minimum a defined list of information concerning cross-

border payments to senders and receivers

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Consultation questions

• 11 questions

• Includes questions on the proposed targets as well as how to monitor progress against them

• No right or wrong answers!

• Deadline for responses: Friday 16 July 2021

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Thank you!