Discussed Insights from Point Zero Forum: Focus on G20 Objectives and International Trends
In a recent presentation at the Point Zero Forum held in Zurich, Switzerland, Ian Manns, the VP of Cards & Global Indices, discussed the performance of the cross-border payments industry against the G20 Roadmap's 2027 targets and key trends shaping the industry.
The G20 Roadmap for Enhancing Cross-Border Payments aims to harmonize fragmented payment systems and regulations worldwide, with the ultimate goal of making cross-border payments more efficient. Ian's talk focused on the progress made in meeting these targets and the challenges that lie ahead.
Our platform's data contributes significantly to the G20 Roadmap. It supports key objectives such as improving speed, reducing costs, increasing transparency, and enhancing interoperability across payment systems globally. The data enables compliance with standards like ISO 20022, which is being adopted for seamless payment messaging and interoperability across jurisdictions.
Moreover, our platform's data plays a crucial role in interlinking fast payment systems globally, facilitating real-time payment verification and settlement across borders, thereby avoiding multiple intermediaries and enabling faster, more affordable transactions. This aligns with the roadmap's strategic emphasis on interlinking fast payment systems to reduce costs, shorten transaction chains, and boost transparency.
The platform also supports verification processes like Verification of Payee (VOP), which reduces fraud by validating recipient details before transactions complete. This is in line with the roadmap's emphasis on security and reliability, which is critical for building trust in cross-border payments.
Furthermore, our platform's data helps regulators and financial institutions to align legal, regulatory, and supervisory frameworks internationally, enabling compliance with anti-money laundering (AML) and combating terrorist financing (CTF) standards, which are vital pillars of the G20 initiative.
Despite the progress made, several challenges remain. The global average transaction costs for all forms of retail cross-border payments are currently significantly above the 1% target for 2027. Only 34% of cross-border retail payment services arrive in under one hour, falling short of the 2027 target of 75%. Furthermore, many retail cross-border payment corridors remain above the maximum of 3% costs.
However, there are significant opportunities to advance in alignment with the G20 Roadmap, even if the 2027 target is missed. Greater partnering, particularly by banks, is increasing the capabilities that businesses and consumers have access to. Real-time payments infrastructure is advancing quickly, and stablecoins are presenting new revenue opportunities and drawing industry attention.
Cross-border retail payments, including B2B, B2C, C2B, and C2C, are expected to grow significantly by 2032. Regions like Latin America and Sub-Saharan Africa have the highest share of corridors still above 3% of total costs, with more than three-quarters of the former's corridors above the threshold. Europe and South Asia have the lowest costs for cross-border P2P payments, with costs at 2% and 2.5% respectively, but still significantly above the 1% target.
In summary, Ian Manns' presentation at the Point Zero Forum highlighted the progress made towards the G20 Roadmap's ambitious targets for cross-border payment enhancement. Our platform's data is playing a crucial role in this process, enabling standardized, secure, and interoperable payment processes that contribute directly to the roadmap's objectives. Despite the challenges, there are significant opportunities for advancement in the cross-border payments industry.
Businesses and financial institutions can leverage our platform's data to align with the G20 Roadmap's objective of harmonizing payment systems and regulations globally, thereby enhancing the efficiency of cross-border payments. The use of technology in our platform, such as Verification of Payee processes, contributes to the roadmap's emphasis on security and reliability, which is vital for building trust in cross-border transactions. Furthermore, advancements in technology, like stablecoins and real-time payment infrastructure, align with the strategic goals of the G20 Roadmap and present new opportunities for progress in the cross-border payments industry.
